This is the SFN Market Report with Brooks Schaffer of Palmetto Grain. Reach him at brooks@palmettograin.com or 843-540-4540.
This week started off as more of the same in the grain markets as we continued to drift lower. Harvest is progressing rapidly across most of the U.S. Bean yields continue to come in better than expected, and corn yields are more up and down. Harvest pressure continues to weigh on the market, but we hope we are finally seeing some bottoming action in corn and beans. Soybeans held support at $12.35 and closed higher on Thursday. Corn held support at $4.5725 and closed higher Wednesday in the first positive close after six consecutive sessions lower. U.S. harvest has been pressuring prices, as has South American planting. South American planting is moving rapidly, and there are no current weather threats. The super El Niño has not had a negative effect on South American weather so far, but there is still a lot of growing season ahead.
Money flow will still continue to dictate price action, and the speculative money still has a lot of length it can sell if it chooses to. Seasonally, the timing is right for a harvest low to be in now that we are moving past the halfway point, but there are still a lot of outside influences. Wheat was pressured this week after news that Putin agreed to resume three-way peace talks. The market was still optimistic about progress despite new and repeated Russian attacks soon after the story broke. The market is also looking past all the new flash sales of soybeans to China we have seen recently. At this point, the market assumes they are going to buy 25 million metric tons and not a bit more. We also saw a flash sale of beans to Spain, which is notable because the country has no political reason to buy U.S. beans. We need to see more such sales to show that the U.S. is competitive in the world market for beans again. The export sales report was impressive on Thursday but did not seem to move the market much.
There is so much inertia in the markets. When prices are sliding lower, it seems like every new headline is read by the market as bearish. When the markets are rallying, everything is read as bullish. Getting over the hump for harvest is the first step. Now we need something to spark some buying.