Early Market Talk September 24, 2020

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Soybean harvest gaining momentum with regions in Iowa pushing past 40% yesterday. Yield reports lead me to believe our StoneX customer survey yield of 55 is certainly doable. USDA has IA at 54 bpa and was 55 a year ago. State record 60.5 in ’16.

Markets under pressure at 0630 with CZ20 off 5¢ at $3.64 ½ and SX20 13 ½¢at $10.01. Volume total to this point 29 and 44K respectively.

Dalian corn futures sharply lower.

Dow futures stable this morning after another sharp drop yesterday. Crude a nickel higher.

Corn open interest near 1.5 mln contracts with 53% of that in the CZ20 contract. Soybean OI 939K contracts with SX20 holding 43%. Spread implications moving forward?

Soybeans leaving the “Greed” phase of the price continuum heading toward “Fear”?

SXSN joined SXSF in the carry arena overnight. SXSN a penny carry this morning.

CA Governor Newsom signed an executive order yesterday that would ban the sale of gas-powered cars by 2035. A blow to gasoline demand. A blow to ethanol demand.

Commodity Weather Group has their updated US corn yield at 176.5 bpa down 1.3 from their Aug estimate. They have IA at 182.7 bpa compared to our estimate of 192 and USADA at 191. I’m still in the camp out StoneX survey estimate of 178.5 is solid.

Export sales data at 0730 will update Chinese purchases the previous week and clean up running totals. We have China near 10 mmt of corn and 20 mmt soybeans for 20/21.

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