Market Commentary  10/01/20 3:31:40 PM Printer Friendly VersionPrinter Friendly Version

Thursday October 1, 2020

Corn closed 3¾ cents higher today in a 7-cent trading range, but off daily highs. Funds were buyers again today, picking up 10,000 contracts by mid-day to add to an estimated long position of 145,000 contracts as they adjust to the new balance sheet possibilities created by the surprising stocks report that goes along with reduced production ideas already in the market. CZ has now rallied 56 cents since mid-August. 20/21 ending stocks projections in May of 3.3 bln. bu. have transitioned to 1.8-2.2 bln. bu. depending on how aggressive the analyst wants to be – quite a change in five months. Next week’s S&D report on the 9th becomes that much more interesting after yesterday. Weekly export sales were above expectations at 79.9 mln. bu. and bring YTD commitments to 969.3 mln. bu. vs. 382 mln. bu. last year. Mexico, Japan, China, and Guatemala the buyers of note. China has purchased 392 mln. bu. of corn in the known destination category – seems we’ve been waiting since 1996 for them to be aggressive buyers of U.S. corn, so it’s nice to see it happen. Producer selling slowed today after a very active day Wednesday. Lack of harvest activity in the eastern belt and bullish attitudes in play.

Soybeans closed unchanged, but not before rallying 11 cents higher during the session. Trading range was 13 cents. Funds were buyers of 2,000 contracts at mid-session to add to an estimated long position of 217,000 contracts. The sharp rally yesterday held its gains, but a bit of harvest pressure mentality was evident today, even if producer selling was lighter than yesterday. The perceived slowdown in Chinese buying interest last week has been supplanted by concern over dry weather in Brazil possibly setting harvest back as well as curtailing production, both of which could translate to more demand for U.S. beans, and that demand lasting a bit longer than usual in the 20/21 marketing year. What a difference a week makes! Weekly export sales were very good at 95.2 mln. bu. and bring YTD commitments to 1.401 bln. bu. (record large for this time of year) vs. 520 mln. bu. last year. Buyers of note were China and Mexico. Daily sales announcements have slowed but Egypt bot 120 tmt of U.S. beans for 20/21 delivery.

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