Corn Market Update

? Prices:

• September Corn (CU): $3.74, up 2 1/2 cents; inside day higher
• December Corn (CZ): $3.97 1/4, up 2 3/4 cents; inside day higher
• September/December Spread (CU/CZ): -23 1/4, down 1/4 cent; new contract low at -23 3/4

? Market Headlines:

• Ethanol data in this morning's weekly report from the EIA showed average daily production in the week ending August 8th at 1.093 mil bbls/day, which was up 1.1% from last week and up 2.4% from the same week last year.

• Ethanol stocks for the week came in at 22.649 mil bbls, which was down nearly 5% from both last week and last year, and was the lowest weekly reading for any week since November of last year.

• We estimated corn usage at 108.0 mil bu, which brings cumulative marketing year usage to 5.194 bil bu; this compares to 5.068 bil bu last year and the USDA's newly revised marketing year forecast of 5.470 bil bu.

Summary:

Following yesterday's plunge to new contract lows on sharply higher production estimates by the USDA, corn futures put in a quietly higher day on Wednesday, with there being little of note other than this morning's weekly ethanol update. The looming supply glut is going to hang over the market like a black cloud for the foreseeable future, but that prices didn't expand on yesterday's selling and make new contract lows today is at least potentially a positive sign for the rest of this week.

Soybean Market Update

? Prices:

• September Soybeans (SU): $10.24, up 11 1/4 cents
• November Soybeans (SX): $10.44 1/4, up 11 1/2 cents
• September Soybean Meal (MU): $287.00, up $5.60/ton; inside day higher
• September Soybean Oil (LU): 53.39, up 0.15 cents/lb
• September/November Spread (SU/SX): -20 1/4, down 1/4 cent

? Market Headlines:

• September soybean futures closed above their 200-day moving average for the first time since before the 4th of July holiday on Wednesday, as upward momentum led prices higher for a third consecutive session this week.

Summary:

Other than follow through rhetoric from Tuesday's WASDE report, there wasn't a lot new in the soybean space on Wednesday though funds continued to cover shorts. The lower acreage base has left not a lot of room on the balance sheet for now, but like we said yesterday, we see the demand side of the equation as likely being overstated with no China demand, which means ending stocks are potentially not as tight as the number that was printed yesterday. The other ongoing story remains China and there was nothing new on this front throughout the day today either.

? Prices:

• September Chicago Wheat (WU): $5.07 1/4, up 2 1/4 cent; new contract low at 5.02 1/4
• December Chicago Wheat (WZ): $5.28 1/4, up 2 1/4 cent; new contract low at 5.23 1/4
• September/December Spread (WU/WZ): -21, unchanged

? Market Headlines:

• Private analysts slightly increased their estimates of Russia's wheat crop today and yesterday following Rosstat data that showed planted area was likely higher than initial estimates. Meanwhile, Russia's ag ministry reported harvest at 47% complete, with equates to roughly 75 MMTs.

Summary:

Wheat pricing has been almost entirely a product of the corn market the past couple days, as ballooning feed grain supplies has pressured both. This, along with the advancement of harvest in Russia, has kept upward price action limited mostly to temporary bouts of short-covering and we would expect this to mostly continue in the short term.

Corn

• Corn futures have continued to work lower over the past week, with the market having again made a new contract low at 3.68 3/4. At this writing, this marks initial support over the next week, with a failure of this level likely still leading to a test of last summer's low just above 3.60.

• Should this fail, the next level support will likely not be seen until the 3.35 area, which marks the low from 2019.

• Resistance over the next week will come first near 3.83-3.84, which marks the 10-day moving average, as well as the report day high from Tuesday and 38% retracement of the late-July to recent contract low slide.

• RSI continues to be near oversold territory, and is seen at 32.9 today.

Soybeans

• The soybean chart looks drastically different today than it did this time last week, with prices taking all of three days to jump right back to their mid-July high. With the market now back above both the 100 and 200-day moving averages, first resistance from here will be the open chart gap from 10.35 1/2 to 10.36 1/2.

• Above here, major upside resistance will be seen at the summer high of 10.67 1/2.

• Support levels this week will be largely retracement oriented with the sharp run up in recent days; 38% back from today's high to the low made last week comes in at 10.02, while 50% comes in at 9.94 and 62% comes in at 9.86 5/8.

• RSI has also quickly rebounded, and is seen at 62.0 today.

In Other News

• Livestock markets again traded mixed on Wednesday, with both cattle and hogs seeing fairly wide trading ranges:
• October live cattle: $229.42, up 40 cents
• September feeder cattle: $346.62, up 37 cents
• October lean hogs: $90.77, down 82 cents

• Outside markets traded sideways/mixed for the most part on Wednesday:
• Crude Oil Futures: down 30-40 cents/bbl
• Stock index futures: The Dow Jones index is up 490 points, the S&P500 index is up 20 points, and the NASDAQ is up 10 points; new contract highs for the S&P and the NASDAQ
• US $ Index: down 20-30 points

• EIA also updated petroleum stocks data in this morning's weekly report:
• Crude Oil Stocks - up 3.036 mil bbls to 426.698 mil bbls
• Gasoline Stocks - down 0.792 mil bbls to 226.29 mil bbls
• Distillate Stocks - up 0.714 mil bbls to 113.685 mil bbls
• Implied gasoline demand in the week was estimated at 9.000 mil bbls/day, compared to 9.040 mil last week and 9.045 mil in the same week last year.

• Treasury Secretary Bessent further pumped the breaks on any sort of immediate trade deal with China following Trump's Truth Social post coming out of the weekend, telling Fox Business on Wednesday that the next meeting between the two sides would likely be sometime in the next two or three months.

Weather Outlook

? Short-term Forecast:

• The mid-section of the Midwest looks to turn drier through the end of the week and weekend following additional thunderstorm activity on Wednesday. Meanwhile, the northwestern part of the area and also the southeast, will see continued wet weather, though rainfall totals in both places aren't expected to exceed 1-1.5".

• Temperatures look to remain warm for another several days into next week, while cooler air is then forecast for most all of the Midwest by the end of next week, as ridging returns to the western US.

? Extended Forecast:

• Week two precip maps trended drier at mid-day today in the southeast, but otherwise offered similar outlooks to what has been seen the rest of the week in keeping most of the Midwest in a drier pattern.

• Not a lot new on the 10-15 day temperature maps this afternoon, as both the EU and GFS models continue to be in good agreement on well below average air temps being seen for most all of the US east of the Rockies into the last week of August.