September report neutral to bullish

By Doug Tenney, Leist Mercantile

A plethora of numbers were released today with the USDA WASDE report at 12 noon ET.

No major surprises today.

Key numbers to watch today included the U.S. corn and soybean yields as well as corn and soybean imports into China.

USDA projects the U.S. corn yield at 178.5 bushels with the U.S. soybean yield at 51.9 bushels. On grain imports into China, soybean imports are pegged at 99 million tons and corn imports of  7 million tons.

Traders were already expecting a volatile day hours before the report. Shortly after the report was released, corn was up 3 cents, soybeans up 16 cents, and wheat down 2 cents. At the 8:45 a.m. grains pause, corn was up 2 cents, soybeans up 6 cents with wheat up 1 cent. Just before the report release corn was up 2 cents, soybeans up 10 cents, and wheat down 1 cent.

Trader estimates had expected the U.S. corn yield to be 178.3 bushels per acre, last month it was 181.8 bushels. They had expected the U.S. soybean yield to be 51.8 bushels per acre, last month it was 53.3 bushels. Last month USDA had soybean imports into China were 99 million tons while corn imports into China were 7 million tons. Both corn and soybean imports into China should be growing larger in coming months.

Corn and soybeans have had an impressive rally this past month. China has been a constant buyer of U.S. corn and soybean in recent weeks.

Earlier this week, December CBOT corn had a 200 day moving average at $3.6175. Yesterday marked the first day it closed above that average since August 2019. November CBOT soybeans with the close yesterday ended a consecutive string of 12 days higher on the day. Just before the report, December corn was at $3.67 ½, up 2 ½ cents. November soybeans were $9.88, up 10 ½ cents.

US grain export sales this morning had soybean sales of 116 million bushels, considerably above the high end of trade expectations. Corn sales were almost 72 million bushels, just below the high end of trade expectations. Well over half of the corn sales or 65% were to China with soybean sales at 50% bound for China.

Three months of flooding in China continues to be a growing concern. Recent typhoons have drenched China the past week as the flooding continues to worsen, especially on the Yangtze River, home of the Three Gorges Dam. It is the world’s largest dam. Numerous reports suggest this dam has increasing chances of failure with the accumulation of this summer’s flooding. If you wake up this weekend and can’t get back to sleep, take a few minutes at your computer to Google “Three Gorges Dam.”

Expect China pricings along with weather to be the market movers this month.

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