November Soybeans: November soybeans fell 40 1/2 cents last week to $8.61 3/4. Most of the damage came on Friday after USDA predicted a larger-than-expected 4.59 billion bushel soybean crop with a higher-than-expected yield of 51.6 bushels per acre. The August WASDE report does carry a wide 90% confidence interval of plus or minus 10.5%, but there seems little room for a bullish argument as weather has been generally favorable across the Midwest. Technically, the three-week correction came to an abrupt end and prices are back near their lowest level in nine years with harvest pressure typically lasting until early October. Trade problems with China are also a bearish pressure that add potential volatility to this year's soybean prices.
December Corn: December corn closed down 12 1/2 cents last week, ending at $3.71 3/4 Friday. Like soybeans, corn prices were hurt by a higher-than-expected crop estimate of 14.59 billion bushels from USDA, based on a record high yield estimate of 178.4 bushels per acre. Unlike soybeans however, corn has a more hopeful demand situation with USDA estimating a 20% reduction in world ending corn stocks in 2018-19. With trader positions more balanced than they were in May, December corn has a better chance of maintaining its sideways trading range through harvest.
September Chicago Wheat: September Chicago wheat dropped 9 1/2 cents last week to $5.46 3/4, a modest loss, compared to row crops. USDA's numbers were fairly neutral for wheat with USDA estimating 4% less global production in 2018-19, an estimate that could go lower if dry weather concerns are as bad as they currently sound. Technically, September Chicago wheat is in a precarious position, having attracted the largest noncommercial net-long holding on record, but not yet able to sustain trading above last year's high of $5.74 1/2. On the bullish side, the weekly stochastic has not yet turned lower and fundamentally, wheat currently has the most bullish potential it has seen since 2012. It is close to a coin flip, but we have to say the trend is currently up until proven otherwise.
Comments above are for educational purposes and are not meant to be specific trade recommendations. The buying and selling of grains and grain futures involve substantial risk and are not suitable for everyone.
Todd Hultman can be reached at Todd.Hultman@dtn.com
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