Daily comment for Friday, August 21

That story came after the close, when Pro Farmer released its final national corn yield at a bit over 173 bushels, more than 7 bushels under the USDA's own number and the widest gap between the two from this tour in at least 20 years. Soybeans told a different story, with the tour's own final figure actually landing above the USDA's number instead of below it. It is a split result that cuts against the fade we had been planning on all week.

Outside markets were mixed, crude and the dollar both easing slightly while the Dow gained back 400+ points after yesterdays extreme selloff.

Key Points/Developments

Technicals: Dec corn added 5 cents to close at 508 1/2, a fresh high for the move and its best level in well over a year, settling just a few cents under the 2023 contract high. That old high is the next hurdle, and a clean move through it on continued strength could open the door to fresh contract highs above 514. Support falls back to the 506 area we had been watching as resistance, then 500, then 492 to 493, then 480.

Nov beans added 3 cents to settle at 1239 1/2, stalling right at the 1240 resistance we flagged yesterday. A close above that opens the door toward the May highs, while support comes in at 1222, then 1210 to 1212, then 1199.

Spreads: The Sep/Dec corn spread held steady at 24 3/4 cents. The Sep/Nov bean spread narrowed to 14 1/2 cents from 15 3/4 yesterday, old crop gaining a bit of ground on new crop today.

Weather: TStorm left its ratings unchanged again today, corn, soybeans, and winter wheat all still neutral. Some private estimates already are pointing to another one to two point pullback in Monday's crop condition ratings given how far along maturity has moved.

The afternoon guidance calls for a bit more moisture east of the Mississippi and building heat toward the central Plains, Missouri, and Iowa late next week, right as the crop most needs to finish filling without further stress.

Markets/Trading Implications

We had spent most of this week talking about fading any friendly Pro Farmer results, since the final tour number usually lands a bit above what the week's daily reports suggest. Instead corn's final number came in well under the USDA, not just the 2-4 bushels rumored, and the kind of gap from this tour we have not seen in a couple decades.

Barring some big shift in the fundamental or macro picture over the weekend, we would expect corn to open higher Sunday night, with fresh contract highs a realistic possibility. Given how often this tour has ended up running well under the USDA without that gap holding up over time, though, we would be careful chasing the move with fresh money.

Beans are more of a mixed bag, with the tour's own final number actually coming in above the USDA figure instead of below it. The uptrend and this week's demand news could keep them supported, but the last couple of days have shown some cracks, and with a carryover still projected north of 300 million bushels, we would think the near term upside is more limited than corn's. It is also worth noting that the fund buying behind this week's strength, per the data below, was mostly short covering rather than fresh buying, one more reason not to chase this higher.

We will be watching Sunday and Monday's trade closely before making any changes. Every situation is a little different, so give us a call and we can talk through where you stand.

Other Notes

• For the week, Dec corn gained 25 1/4 cents, Nov beans gained 47 cents, Chicago wheat gained 6 3/4 cents, and cotton gained 3.56 cents
• September options on the grains expired today, adding a bit of extra noise into the close on a session when the real story was still to come after the bell.
• FAS reported a hefty round of new sales this morning, 712,000 metric tons of soybeans to China plus another 720,000 to unknown destinations, along with 205,000 metric tons of corn to unknown. That puts new crop soybean commitments at 503 million bushels, the best pace for this point in the year since 2022 and up 238 million from a year ago.

Static Notes

• Commitment of Traders report released today, covering positions through Tuesday, August 18, showed funds piling on even more length across the board. Corn's net long jumped to about 182,000 contracts, up roughly 56,000 on the week, funds buying about 9,000 new longs and covering another 47,000 of shorts. Soybeans saw a similar swing, net long growing to about 152,000, up 43,000, while wheat's net short narrowed to about 25,000, a shift of roughly 8,000.
• That buying came right into a week that was already rallying hard, not against it. Over the reporting week itself Dec corn gained 27 1/2 cents, Nov beans gained 48 cents, and Chicago wheat gained 34 1/4 cents. In the three market days since Tuesday's cutoff, corn added another 20 1/2 cents, beans another 23 1/4, and wheat another 17, so the buying has not let up.

Have a great weekend!

Clayton and Taylor

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