MONDAY, September 25, 2023, 4:50 AM CST
MORNING MARKET COMMENTS BY BOB LINNEMAN
This is Kluis Commodity Advisors with your opening grain comments for Monday, September 25, 2023. Grain prices are mixed to start the last week of trading for the month of September. Traders are interested to see what this afternoon’s Crop Progress shows for harvest updates to corn and soybeans. The weekend rains parked combines in many areas for at least a few days. The weakness in the stock market last week was enough to push futures to the lowest level since early June. If the stock market continues to be hit with heavy selling pressure, then we should not be surprised to see the grain market slide lower as well. In the overnight Globex trade, corn futures are down 2, soybean futures are down 4 and wheat futures are down 1 to 3 cents.
TO DO: No new recommendations at this time.
PRICE TARGETS: Click here to review our current price targets.
WHAT WE’RE THINKING: Grain traders are starting to lower US wheat export targets. The sluggish pace to since the start of the marketing year has not changed. Many analysts are blaming the strength in the US dollar.
WHAT TO WATCH: US lawmakers have until September 30 to reach a deal over the federal budget, or the government will shut down on October 1. There was little change from either side over the weekend.
THE MARKETS
Overnight Markets
December Corn: The trading range is 3 cents; prices are down 2 at $4.75.
November Soybeans: The trading range is 7 cents; prices are down 4 at $12.92.
Wheat: CBOT wheat is down 1; Minneapolis wheat is down 3 and KC Wheat futures are down 3 cents.
Global Stock Markets: The stock market in China is down 1.8%, Japanese stocks are up 0.8% and European stocks are down 0.7%.
Outside Markets: The US Dollar Index is up 0.10 at 105.36, crude oil is up 22 cents per barrel at $90.25, S&P futures are down 4 points at 4,357, Dow futures are down 24 points at 34,208 and gold futures are down $3 at $1,943.
Livestock Futures: Livestock futures closed mixed on Friday. October Lean Hogs closed down $1.42 at $81.52. October Live Cattle closed up $2.10 at $187.07. October Feeder Cattle closed up $1.37 at $259.15.
TODAY’S CHART: This is the daily chart of December corn futures. You can see that prices have struggled to break above the 10-day (the blue line) and 20-day (the gold line) moving averages since the sell-off started in late July. The next major level of support comes near $4.62 (the horizontal black line), the low from September 2021. The momentum indicators (below the price chart) slightly favor the bull camp. The corn bulls need a friendly headline to help kickstart a rally, but that can be tricky this time of year. Until we see a convincing move above the moving averages, the momentum traders will likely wait on the sidelines or maintain their short positions.
NEWS AND EVENTS: Good morning! I’m DT, Al’s weather guy. Widespread rain fell across 50 to 70% of the northern and western Corn Belt over this weekend, bringing 0.5 to 2 inches of rain. Some locations reported over 3 inches. The eastern Corn Belt was mostly dry This week brings in seasonal temps with mostly dry conditions over the Corn Belt with some extreme rain possible in the Gulf Coast.
The extended forecasts are mostly dry through mid-October, with some rain possible in the eastern Corn Belt.
In South America, the El Nino pattern continues. There is wet weather in southern Brazil and Argentina while central and northern Brazil remain dry.
Al tells me that the dry extended weather forecast will allow harvest to move rapidly into mid-October. Even though it is dry in much of Brazil, he says hedge pressure from US farmers will take prices lower to start, but expect “two-sided” trade early this week.