Daily comment for Friday, August 14

The Black Sea war remains the driver behind wheat's strength, with fresh reports of severe damage to a large Russian port on the Baltic Sea adding to the toll on their export capacity, both for wheat and the corn they ship. Ukraine's own corn exports are now getting caught up in the disruption as well.

Outside markets had a quieter tone with crude bouncing and equities sinking lower, but not as much as expected following a disappointing CPI

Key Points/Developments

Technicals: Dec corn jumped 11 1/4 cents to 483 1/4, breaking above the 480 resistance we flagged yesterday. The July highs come in next around 487 to 492, then 500, then the one year high near 506. Support falls back to 480, then 472 to 474, then the 50 day average near 457.

Nov beans gained 10 1/4 cents to 1192 1/2, clearing the 1183 to 1185 resistance zone and closing in on Tuesday's spike high near 1199. A close above there is fresh territory. Support comes in at 1183 to 1185, then 1174 to 1176, the 50 day average.

Spreads: The Sep/Dec corn spread held mostly steady at 24 1/4 cents. The Sep/Nov bean spread narrowed to 14 3/4 cents from 16 1/4 yesterday, old crop outperforming new crop again today.

Weather: TStorm left corn at Slightly Unfavorable today, unchanged, but pulled soybeans back down to Slightly Unfavorable as well, reversing Wednesday's improvement to Neutral. Winter wheat held at Neutral. TStorm called it a close call, with beneficial rain in the Corn Belt weighed against building southern heat as harvest nears, and ultimately sided with the heat risk.

There are no changes to the forecast track. Rain focuses across the northern half to two thirds of the central US through early next week, with 1 to 2 inches common across the Corn Belt over the next 5 days, while strong heat continues for the southern 20 to 30 percent of corn and soybeans over the next 7 to 10 days. The 1 to 2 week outlook remains uncertain, with the newest model guidance leaning cooler, though a more probable middle ground calls for scattered storms and mixed temperatures late next week.

Markets/Trading Implications

Clearing those resistance levels in both corn and beans is a genuinely constructive technical development, coming on the heels of a week that already delivered a surprise yield cut and an escalating war premium in wheat. Today's soybean rating reversal only adds to that, a reminder that this heat stretch is not done influencing the yield conversation yet.

Crop tour results are starting to trickle in, and the early read out of Illinois was a split one, strong soybean pod counts against disappointing and variable corn checks. We would treat any single day of tour results as one more data point rather than a verdict, but it fits with the broader theme of corn carrying more yield risk than beans right now heading into the final stretch of fill.

We remain comfortable holding where we sit after a strong week like this. Every situation is a little different, so give us a call and we can talk through where you stand.

Other Notes

• Russia's Novorossiysk port now has all three of its terminals shuttered following a Ukrainian drone strike on another Russian Baltic Sea port, cutting Russia's export capacity to an estimated 20 to 25 percent of normal for the foreseeable future. Ukraine's own corn exports are getting caught up in the disruption too, leaving world corn trade this fall leaning more heavily on the US, Argentina, and Brazil.
• Early crop tour results out of Illinois were mixed, with excellent soybean pod counts against corn checks that came in smaller and more variable than hoped. Combined with recent vegetation health data showing deterioration in North Dakota, the southern Plains, and parts of Illinois, corn yield risk continues to lean toward further trimming as more tour results come in over the next two weeks.
• For the week, Dec corn gained 21 1/4 cents, Nov beans gained 16 1/4 cents, Chicago wheat gained 35 cents, and cotton gained 32 points.

Static Notes

• Commitment of Traders report for trading through Tuesday, August 11, indicated that actively traded funds sold 15k corn, reducing their net long to 167k. They sold 24k soybeans, reducing their net long to 101k. They sold 8k wheat, increasing their net short to 31k.
• In the three market days since this report, corn gained 22 3/4 cents, beans gained 23 3/4 cents, and Chicago wheat gained 44 1/2 cents.

Have a great weekend!

Clayton and Taylor

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