Written Commentary
SOYBEANS
Soybeans, soymeal and soyoil ended lower. US Fed continues its war against inflation. Russia continues its war against Ukraine. Global food and fuel demand is in decline. USDA estimated US Sep 1 soybean stocks at 274 mil bu vs 256 expected. Last year USDA also found 82 mil bu above trade guess. USDA increased US 2021 crop by 30 mil bu and estimated residual at 12 mil bu vs 16 previous. Fact USDA increased US 2021 soybean crop suggest that US 2022 crop could also end up higher than USDA Sep guess. Higher carryin suggest US 2022/23 soybean carryout is now near 234 vs USDA 200. If SA crop are normal and China soybean imports are down, final US 2022/23 carryout could be closer to 385. SX dropped below Sep 8 low near 13.73. Next support is the13.49 gap.
CORN
Corn futures ended higher but off session highs. USDA estimated US Sep 1 corn stocks at 1,377 mil bu vs 1,512 expected. USDA dropped the US 2021 corn crop 41 mil bu and raised residual 106 mil bu. USDA slide of hand by raising residual helps explain the lower stocks number. End of year dry and warm weather could also suggest USDA Oct 12 corn crop estimate could also be lower. USDA increased US 2021/22 feed and residual from 5,600 to 5,706 and 5,603 last year. This despite higher feed cost. USDA continue to estimate US 2022/23 corn exports near 2,275 mil bu vs 2,475 last year. Some fear fact corn export commit is only 49 pct of last year and Ukraine, Brazil and Argentina corn export prices are below US, final US corn exports could drop 275 mil bu to 2,000. Lower US 2022/23 carryin could drop US 2022/23 corn carryout to 1,071. Drop in exports could push the carryout back closer to 1,346. Higher corn prices could increase US 2023 corn acres. Some feel corn futures could see resistance going into US harvest. US October Midwest weather looks warm and mostly dry which should help harvest pace. CZ traded above the 20 DMA near 6.78 and tested 6.96. CZ closed near 6.77. There remains uncertainty over Ukraine exports and west response to Russia annexing 4 Ukraine states.
WHEAT
Wheat futures ended higher. USDA estimated US wheat Sep 1 stocks at 1,776 mil bu and in line with the average trade guess. The big story in wheat was USDA lowered US 2022 crop from 1,783 mil bu to only 1,649. Most of the decline was in winter wheat and HRW. USDA dropped KS crop to 244 and OK to 68. The 137 mil bu drop in crop tightens already tight HRW supply and end stocks. The rally in wheat prices could slow demand but could also increase US 2023 wheat acres. US south plains though still needs rains to help with plantings and emergence. Some feel Wheat futures will remain volatile given uncertainty over next move by Russia and West response to Russia annexing Ukraine territory. WZ pushed above 9.18 and 9.26 resistance, tested 9.45 and settled near 9.21. KWZ traded above 9.94 resistance and tested 10.10 before ending near 9.92.
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