Early Market Talk September 14, 2020

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Soybeans continue their march higher making another new high for the move at $10.08 ¾ overnight. SX20 the highest this date in six years and suspect about to run out of gas. Reality of yet lower yield needed rather than fear of them.

At 0600 CZ20 trading 1 ¾¢ higher at $3.760 ¼ with SX20 5¢ higher at $10.01. Both contracts showing solid overnight volume totals of 32 and 36K to this point. KC wheat 2 ¼¢ higher at $4.73 ½.

Dow futures starting the week strong trading up 273 points at 27,885. Crude off 10¢ at $37.23. US $ showing significant weakness this morning and some modest weakness against the Brazilian Real.

September USDA reports largely as expected. Lower corn yield partially offset by reduced demand numbers leaving corn carryout a more than adequate 2,503 mln bu. Soybean yield cut of 1.4 bpa and reduced carry-in from 19/20 took ending stocks down to 460 mln bu from 610. Trade now contemplating a further yield reduction into the October report. Not a big issue for corn. Beans another story.

Corn open interest up 23K contracts Friday. Soybean OI up 13K.

Soybean prices trading the best level this date since 2013. Stocks / use like the 2016 crop year which saw SX16 peak out at $10.20 on October 27th. Rally continued that year into the first of the year before turning lower and losing nearly two bucks by summer. Stocks / use today at 10.4. In 16/17 it was 9 spending a lot of time around 10 later in the year.

Bean spreads all leaking wider this morning. Corn spreads tighter. SXSF at 3 ¾¢ with CZCN at 18 ½¢. Funds and specs all loaded up long beans against a short commercial. That must have an impact as we move close to first notice day on the SX20 contract.

Updated with CFTC data Friday we now show Funds net long 46K corn and 193K soybeans. Record net soybean long was just over 240K in May of 2012.

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