Grains end the week down | September 29, 2023

The grain markets were hit hard today with many of the wheat futures contracts falling to new lows. The negative and somewhat confusing USDA reports along with growing uncertainty about the Federal government shutdown added to the selling. 

A few comments about the reports:

I think that the wheat report was really bearish but other than a slowdown in corn and soybean usage in the last three months, I did not understand why corn and soybean prices were hit so hard.  I do not look at the corn and soybean numbers as being long-term bearish. It is the wrong time of the year to get bearish on corn and soybeans. 

At the close today, December corn was down 11¾¢, November soybeans closed 25¢ lower, and wheat futures managed to close 21 to 38¢ lower with many contracts falling to new life-of contract lows.  

In the outside markets today: The stock market has turned lower again after a higher start with the Dow down right at 200 points. The stock market was down about 1.5% this week and 3.6% this month. The U.S. dollar is down 5 points today. Crude oil fell lower today by 60¢ per barrel but is still up $1 per barrel for the week. 

In the livestock markets on Friday, October hogs closed down $3.75 at $80.20, October cattle closed down $2.30 at $184.20, and November feeders closed down $2.77 at $254.90.  

12 p.m.: Grains down sharply at midday

The corn and soybean markets are sharply lower after the release of the USDA Quarterly Grain Stocks report. The wheat market is also under pressure after the release of the final Small Grains production report. 

Everything on my screen is red today. 

The trade had projected September 1 corn stocks of 1.429 billion bushels, and the report showed 1.361 billion bushels – so why is corn lower? For soybeans the estimate was for 242 million bushels but the report came in at 268 million bushels. This was because last year's crop was under-stated.

For spring wheat, the trade estimate was for 446 million bushels but the report came in at 505 million bushels. 

At this time corn is down 7¢, soybean futures are 24¢ lower and wheat futures are down 18-to-31¢. That is probably why corn futures are lower. 

Looking beyond today's report and ahead to next week, the trade will focus on harvest progress and harvest results. 

In the outside markets, the stock market has turned lower again with the Dow now down 200 points on the low for the week and month. The U.S. dollar is down 10 points today, crude oil continues higher and is now down 46 cents per barrel but is still sharply higher for the week.   

The negative hog and pig report along with the lower stock market has livestock futures all lower. November feeder cattle are down $2.47, October live cattle are down $1.90, and October hogs are down $3.32.

7:30 a.m.: Grains up in morning trading

The corn and soybean markets and wheat prices are higher in the overnight trade. It is slow trading ahead of the USDA reports that will be released at 11 a.m. central time on Friday. The weather in the US is perfect for harvest which is likely to create some hedge pressure in the corn and soybean markets by the close of trade.

There are two keys today to watch in the USDA reports.

First is what the USDA finds for corn stocks as of Sept. 1. The trade has some wild differences in the projected feed usage and therefore ending stocks.

Second is spring wheat yields – the reports I have are for disappointing yields across the entire area. 

I will have a detailed analysis of the USDA reports posted in my mid-day comments by noon today.

At this time corn futures are 1¢ per bushel higher, soybeans are up 3¢ and wheat futures are 3-4¢ higher. 

The U.S. dollar Index is down 0.48 points at 105.74, crude oil is up 10 cents per barrel at $91.79, S&P futures are up 19 points at 4,357. Dow futures are up 138 points at 34,030 and gold futures are up $10 per ounce at $1,879.

Livestock futures should start out higher today.

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Editor's Note: The risk of loss in trading futures and/or options is substantial, and each investor and/or trader must consider whether this is a suitable investment. Past performance – whether actual or indicated by simulated historical tests of strategies – is not indicative of future results. Trading advice reflects good-faith judgment at a specific time and is subject to change without notice. There is no guarantee the advice given will result in profitable trades.

About the Author: Al Kluis has been a commodity advisor and broker since 1976. Kluis is an introducing broker with Wedbush Futures and writes a column, Your Profit, which appears in every issue of Successful Farming magazine. Kluis has published two books on commodities trading and is commonly quoted in major publications including the Wall Street Journal. He is also a featured speaker at commodity conferences nationwide. Kluis is a frequent market analyst for the Linder Farm Radio News Network. A Minnesota farm boy, Kluis was awarded his degree in ag economics from the University of Minnesota in 1974, after which he was executive director of the Minnesota Soybean Association before entering the markets full-time. His family still farms in southwest Minnesota, and Kluis enjoys helping with fieldwork when the markets allow.