Corn – Yesterday’s 2.074 carryout suggests higher price but corn is being held back by beans
↑ Yesterday’s carryout suggests a fair value for Dec corn right around 420
↓ Beans saw a bearish report and an active move lower there is spilling pressure over to corn
↔The corn GTE rating was expected to fall 1% but instead remained steady with last week at 67%
↔This high GTE rating may cause some in trade to anticipate another yield increase on the September report beyond yesterday’s +2.1 move to 183.1
↔Acreage was lowered 700K yesterday, it is possible that may be lowered again but that is tough to predict as we have never seen an acreage lowered as early as August so this is a new factor from USDA
Beans – A major increase to carryout yesterday lowers fair value under $10, export news is needed
↓ Yield was raised 1.2 bu as expected but acreage was also raised 1 million which was not expected, this resulted in a carryout much larger than anyone predicted of 0.560
↔A 0.560 carryout suggests a fair value around 980 which is a level November has already reached
↓ Like corn, bean GTE remained steady when it was expected to fall 1%, trade may fear another yield increase which with no changes to demand would take carryout to a very lofty level
↔We have seen a few 8 AM sales reports as price has moved lower, much more is needed to bring carryout back down to a more manageable level that would still suggest $10 in November
Wheat – Report slightly bullish, overseas back down near yearlong lows, spring harvest at 18%
↑ Carryout slightly yesterday from 0.856 to 0.828, a small decline but an increase was expected
↓ Overnight trade still seeing heavy influence from overnight trade which is back near yearlong lows
↔Wheat is in the time of year where exports can make a difference but recent exports have remained moderate to slightly poor around 350K – 400K
Cattle – Fundamentals neutral but cautious trade continues which may also be light fund selling
↔Yesterday’s PM BB was choice +3.12 Select +1.58 packer BE at 195.58, packer cushion $8.13
↔Solid bounce in BB yesterday but more is needed, trade has seen these 1 – 2 day spikes in BB recently just to see it grind back down to a neutral report
↑ Showlist -6500 this week with packer profits around $8 hint at a potential $1 higher cash trade
↓ After funds liquidated 22K longs last week we need to keep watch for fund trade again this week
↔Yesterday did now show clear signs of fund selling, appearing to be more general cautious trade