9/8/2022

Price action was much more reserved today compared to yesterday.  Grains spent almost the entirety of the overnight session in the green but trade flipped lower after the morning break.  Wheat, which had been trading firmly higher so far this week, lifting corn and soy with it, lost its bid and pulled corn and soybeans below unchanged.  Soybeans finish 1-4 higher and the whole of the corn board from Sept 22 out to July 24 finished 2 cents lower.  The market wants to get bullish on Russian President Putin’s comments about his displeasure with the Ukraine shipping corridor (that he agreed to).  The market is also positioning itself in anticipation of the USDA lowering the U.S. corn yield for this year in their WASDE report on Monday.  The average analyst estimate is 172.5 bpa, a 2.9 bu/ac cut from the August report.  While I do think a 172-172.5 is where our yield likely lands in January, a drop that big from the USDA in one month is not likely.  I'm expecting the USDA to manufacture a soft landing for the corn market with incremental moves in yield and exports over the next 4 months, with ending stocks remaining mostly unchanged.  Weekly ethanol figures showed a 19,000 barrel/day increase in production and stocks off 395,000 barrels.  Implied use for gasoline has been -10.5% over the last three weeks compared to last year, can be interpreted as an early sign of recession.