Headlines:
- THE PRO-FARMER CROP TOUR IS RUNNING AUGUST 22ND THROUGH AUGUST 25TH THIS WEEK
- GRAINS EASE AS OFFICIAL DATA TRUMPS TOUR RESULTS
Grain futures gave back a little more of their newly regained risk premium. Not that the results of the likely key market event of the week, the Pro Farmer tour of the Midwest, were too promising. Ohio, for corn, the tour came in with a yield of 149.0 bushels per acre, only 0.6 bushels per acre above last year’s result, and well below the US Department of Agriculture forecast of a 163.0 bushels-per-acre result. For soybeans, the tour indicated a soft result, showing an average pod count of 1,055.1 per 9 square feet, compared with 1,125.3 in 2015 and a three-year average of 1,250.4. In South Dakota, the tour also indicated a weaker soybean result, with 970.6 pods per 9 square feet, down from 1,055.0 last year. And for corn, the average yield estimate was 149.8 bushels per acre, down from 165.9 bushels per acre last year, and a three-year average result of 160.1 bushels per acre.
Summary:
We are about a week away from the month of September starting and Corn, Wheat and Soybean all closed lower today. Despite some tempered data from the ongoing Pro Farmer Crop Tour, it was the USDA’s favorable crop ratings from yesterday that trumped any potential bullish sentiment today. At the close November Soybean was down 3.50 cents, December Corn was down to 337.50 and December Wheat was down 7.50 cents. All three markets are still hovering close to support.
We have discussed how the commodity markets have reached critical timing periods up from their respective lows. They have generally been moving sideways for approximately the last 13 trading days or so. Iterations of 5, 8, 13 or even 21 trading bars from pivot highs or lows are often areas of reference for being able to time potential market turns. A prime example is the big move down that we saw in Crude Oil futures yesterday.
Yield models for Soybean and Corn continue to grow instead of contracting as some had supposed might happen. Soybean yield models expanded by 0.60 bushels per acre to 48.05 and Corn expanded 1.8 bushels per acre to 176.3 bushels. We have forecasted that either the last week of August or the first week of September might prove to be a turning point. As that time approaches we should study Managed Money’s behavior over the next two weeks as well.
