Commentary
The Quarterly Grain Stocks report showed September 1 soybean stocks at 342 million bushels (the highest since 2020) versus an average expectation of 347 million bushels and a range of expectations from 323
to 360 million. September 1, 2023, stocks were 264 million bushels. On- farm soybean stocks were 111 million bushels, up 54% from a year ago. Off-farm stocks were 231 million bushels, up 20% from a year ago. USDA
revised 2023/24 bean production down 2.62 million bushels and lowered harvested area slightly to 82.3 million acres.
Soybeans ended up following corn slightly higher before pulling back near the close. There was nothing bullish in this report for beans or wheat. Corn was a different story with on farm stocks lower by 80 million bushels versus the average trade guess.
Harvest though advances and in the big production areas it is still a massive crop vs weak demand. Dryness in South America seems to be one of the biggest issues pushing funds out of their shorts. Drought like conditions continue to plague Central Brazil although a small respite is coming the next 5 days. Brazil turns dry again in 80% of the corn/soy belt in the 6-10 day. Argentina’s grain belt is forecast to see 70% rain coverage in the 6-10. Brazil is 3% planted vs 4% last year. As the numbers indicate, planting isn’t a problem yet in my opinion as October begins.
Weekly technical levels are as follows. Bean resistance is at 1073 and then 1080 basis November. A close over and its 11.03, and then 11.25. Support isn’t seen until 10.38 to 10.34. A close under 10.34 and its 10.17 to 10.13. Trade the charts!
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Sean Lusk
Vice President Commercial Hedging Division
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