Editor’s note: Catch Randy Martinson every Friday after markets close on the

Agweek Market Wrap

at agweek.com.

The grains put in a rough performance the third week of September with all of the grains selling off except corn. Corn actually put in a strong weekly performance. After trading to another new contract low, corn rallied to end the week posting 1 to 2 cent gains. All three wheat exchanges and soybeans closed the week posting losses.

Selling pressure dominated the grains the first two sessions of the week while profit taking and technical buying helped trim losses midweek. The Federal Reserve wrapped up their regular two-day meeting Wednesday, announcing no changes to interest rates but did make the announcement that there will likely be one more increase in 2023. The Federal Reserve Chairman also stated that rates will likely remain high for an extended period of time. The news for the third week of September was thin and light as most of the attention focused on harvest activity.

Brazil has started to plant soybeans ahead of schedule due to favorable planting conditions. That means Brazil soybeans will be available a few weeks earlier. But so far Brazil has been hot and dry. If that forecast lingers, production will likely decline. CONAB is only expecting a 3%

increase in soybean acreage in Brazil

, which is a lot lower than the past few years.

A stronger U.S. dollar and macro-economic factors were the main contributors to the sell-off. A poor export sales estimate added fuel to the fire. So far, year to date, U.S. wheat exports are 17% behind last year (which was the lowest in 40 years), sales for corn are 6% behind last year, and soybeans are 34% behind last year. Technical selling was also evident as most contracts had traded to resistance levels.

Strength late in the week was due to technical buying as most thought the early sell-off was overdone. Soybean fundamentals are not that negative to break below $13, which is major support. It seems it might be too early to start to remove all of the production premium out of the market without more concrete ideas on where production will fall.

Thursday’s Drought Monitor continues to show the drought expanding in Minnesota, Iowa, Wisconsin, and Texas. The map is now estimating 58% of the nation’s corn crop is in some stage of drought, up 4% from last week. Soybeans have 53% of the nation’s crop in some stage of drought, up 5% from last week. Hard red spring wheat has 59% of its crop in some stage of drought, unchanged from last week. Winter wheat has 47% of its acreage in some stage of drought, up 1% from last week.

Informa released their acreage estimates for 2024 Thursday afternoon. They are estimating corn acreage for 2024 at 92.5 million versus 94.4 million last year. Soybean acreage is estimated at 86 million versus 83.6 million last year, and all wheat acreage is estimated at 48.7 million versus 49.8 million last year.

Russia and Ukraine have increased the intensity of the war the past two weeks with Russia staging heavy missile attacks on Ukraine grain facilities and at energy infrastructure. Ukraine also increased its attacks on Russia targeting a Russian air base in Crimea. But neither item was market worthy.

The International Grains Council increased world corn production 1 million metric tons to 1.222 billion metric tons. The increase was due to a production increase for Ukraine. The Council lowered world wheat production 1 million metric tons to 783 million metric tons. This was accomplished by seeing production cuts in Australia, Argentina, and Canada while increases were seen in Ukraine and Russia.

Although weather is not as important to market direction this late in the game, the recent rain systems dumping heavy amounts of rain in some areas is deemed friendly as it will keep producers from advancing harvest activity. The trade is not as worried about corn harvest at this point, but the trade is concerned about soybean yield and the potential for the forecast system resulting in further reductions.

The trade is also watching the

Mississippi River issues

. The river is at one of its lowest levels in 35 years and that is restricting barge traffic and increasing basis levels in the southern regions of the U.S. As barge costs and basis increase, the costs of importing U.S. grain increases as well. This has helped to knock the U.S. out of the export game. The inability to move grains at harvest in the Corn Belt and Delta region will also result in a backlog at the ports. If the grains can’t get to the ports timely, it will result in shipping delays. The river level is not as bad as last year, but it is still low enough that normal loading cannot take place.

The grains opened the last week of September mostly lower but ended the session mostly higher with only Minneapolis wheat ending the day lower. By the time the dust settled on Monday, Minneapolis wheat was lower due to position squaring ahead of what is expected to be negative Small Grains Summary report, Chicago and Kansas City were higher due to spread trading between the classes of wheat and due to reports of another round of heavy Russian missile attacks on the port of Odessa. Corn pushed higher on technical buying as well as from Mexico’s recent corn purchase. Soybeans managed to find late buying strength and end the day on the push side.

Monday afternoon’s Crop Progress did little to support the grains as the report was a bit negative. Harvest progress was a little disappointing for all of the grains, but corn’s crop ratings were better than expected. Corn harvest was estimated at 15% complete, up only 6% from the previous week and 2% below expectations. Soybean harvest was estimated at 12% complete, up only 7% from last week and also 2% below expectations. Spring wheat harvest was estimated at 96% complete, up only 3% from the previous week. That shows the recent rain has slowed down activity. And with the current forecast, it will be a slow go over the next two weeks.

Corn’s crop condition rating came in at 53% good/excellent, up 2% from the last week. The biggest adjustment was a 7% increase in Illinois’ crop rating. Ohio dropped 4%. Minnesota and North Dakota dropped 1%. South Dakota improved by 3%.

Soybean’s crop condition rating dropped 2% to 50% good/excellent, which was lower than expected. The biggest adjustments were again in Illinois, up 6% and Ohio and North Dakota, which saw each decline by 3%. Minnesota, Nebraska, and South Dakota all saw 2% declines.

Dr. Michael Cordonnier lowered his yield estimates for the U.S. His corn yield dropped 1.5 bushels to 171.5 bushels while his soybean yield dropped 0.5 bushels to 49 bushels.

Position squaring ahead of Friday’s USDA report was also seen. The average trade estimates for the Quarterly Grain Stocks estimate are as follows. Wheat stocks are estimated at 1.772 billion bushels versus 1.778 billion bushels last year. Corn stocks are estimated at 1.429 billion bushels versus 1.377 billion bushels last year. Soybean stocks are estimated at 242 million bushels versus 274 million bushels last year.

The average trade estimates for the Small Grains Summary Report has all wheat production at 1.729 billion bushels versus 1.734 billion bushels last month. All winter wheat production is estimated at 1.223 billion bushels versus 1.227 billion bushels last month. Other spring wheat production is estimated at 446 million bushels versus 450 million bushels last month. Durum production is estimated to remain unchanged at 57 million bushels.

Estimates for 2022/2023 production have corn production at 13.719 billion bushels versus 13.730 billion bushels last month. Soybean production is expected to be 4.269 billion bushels versus 4.276 billion bushels last month.

Cattle also put in a rough performance the third week of September. USDA’s September Cattle on Feed report was neutral and did not bring much support to the table. But a softer grains complex and expectations for strong cash activity did help keep losses in check. The looming government shutdown added pressure as the meats are not keen on seeing consumers unemployed. Seasonally cattle are starting to approach the time frame for feeder cattle to retreat as supplies start to become more available. The selling pressure and increased concerns of a government shutdown added selling to start the last week of September.

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