We saw a bit of an odd day of trading on the Chicago Board of Trade Oct. 14, currently memorialized as Indigenous Peoples Day — or, as some remember it, Columbus Day. One result of this holiday being controversial in modern times is that it is a government holiday but not a trading holiday. So, none of the regular Monday USDA reports were available, but the trading went on in Chicago.
The result of this is uncertain as far as trading. I tended to believe that Monday trading would follow the trend of Friday before complete trading resumed Oct. 15.
In fact, Oct. 14 we saw the continuation of weaker markets resulting from the Oct. 11 morning release of the U.S. Department of Agriculture World Agricultural Supply and Demand Estimates.
Traders were enthusiastic going into the reports, but pre-report enthusiasm did not last. The minor adjustments reported in supply and demand around the world resulted in bearish reactions in trading.
Corn futures
The biggest market move came in corn futures. The corn yield was tweaked slightly to 183.8 bpa. The corn stocks value was reduced slightly. Traders actually expected a slight decrease in yield. The new production number, helped by record yield estimates for Illinois, Iowa, Nebraska, South Dakota, Wisconsin, New York and Louisiana, is an estimate of 15.203 billion bushels, up from the 15.186 of the September report. As a result of the higher production, December corn futures lost 2 3/4 of a cent Oct. 11, closing at $4.15 3/4.
The exports are helping prices, although it does not seem to be enough to counter negative factors in the market. For the marketing year, which begins Sept. 1, we have shipped out 2.325 million bushels of corn, mostly to Mexico and China. Mexico remains our premier destination, while the recent news from China is that they will import from us 19 MMT this year, as opposed to the amount expected earlier of 21 MMT.
Soybeans
November soybean futures suffered a similar fate. In the process, the contract put in a one-month low. In this case, the soybeans saw USDA cut the yield by one tenth of a bushel, to 53.1 bpa. The market was looking for something better and reacted with a close that was down 9 1/4 cent lower, at $10.05 1/2.
The USDA report Oct. 11 showed global supplies of wheat to be cut an estimated 1.9 MMT. This is not a lot, but it is in the direction that helps prices. The reason for the drop is less wheat coming out of Ukraine and Russia. In the case of Ukraine, it is war-induced production problems, combined with shipping problems as the Russians are threatening ships loading out wheat. In the case of Russia, it is because of continued dry weather problems that are causing some areas to be declared to be in emergency conditions, whatever that means.
Looking at prices, December corn futures put in the high of $4.96 3/4 May 15. At that point, the farmers were all rooting for the market to break the round number of $5 December futures. Instead, we saw a steady decline, and a low of $3.86 Aug. 26. We bounced back to $4.34 1/4 by Oct. 3, but got down to $4.07 1/2 Oct. 14 and continued to $4.06 1/4 in the evening session as this was being written Oct. 14 at 11 p.m. It is critical that we remain above that $4 number.
The November soybeans were trading at $9.93 3/4 in the late Monday session became part of Tuesday on the chart. There has been a significant loss since the morning report Oct. 11. We lost 9 1/4 cents Oct. 11, 9 1/2 Oct. 14 and 6 3/4 cents so far in the late Oct. 14 into Oct. 15 trading. That is 25 1/2 cents down since the report. November beans made the high at $12.20 1/2 in early May. That is $2.31 lower than the high in May.
December wheat futures have lost $2.37 since the high in late May at three ticks from $7.60. We have had a month-long uptrend lately, followed by a few weaker days. In our early trading going into Oct. 15 we had dipped to $5.81 3/4.
In weather news, the Eastern Corn Belt should get some rain this week, but the early crops are past the time of using it for more yield. Now rain will just delay harvest. Farther west, the forecast shows no rain, so an early and fast harvest will continue and the resulting harvest pressure on prices will continue.
The South American weather, which right now has a large amount to do with how much soybeans get planted, is a little damper, with rain forecast. The Brazilians will not plant unless there are good soil moisture conditions or an immediate forecast for rain. The bean crop is now 8.2% planted, but at this time last year they had 17% of the soybeans in the ground.
