Closing Markets: Corn: +8.25.
Beans: +29.75. Wheat: +8.50.
Good evening!
Market Recap-
It was another rally day across the CBOT on Tuesday, with grain and soy markets finishing the day sharply higher and scoring fresh new contract highs again on what continues to be a large inflow of money to the ag space based on perceived US crop loss and a pair of ongoing wars on the other side of the world. The old saying is bull markets need fed daily, and that appears to be exactly what is happening as traders see one bullish headline after another. Markets don't go one direction forever, but there is seemingly little present today that would justify anything more than a correction in the short term.
Corn Summary-
Corn futures closed higher for the ninth time in the last ten sessions on Tuesday, as momentum clearly remains to the upside amid what continues to be little new of note in terms of hard evidence towards a US production figure or updates on either of the wars. We continue repeating it, but until more is known on either of those fronts or something new comes along (Chinese demand, South American weather, etc.), traders are simply going to have little interest in ditching an inflation hedge that has been well-worth-having since late spring. Some type of correction is due sooner than later at this point, but our lean stays bullish short term.
Soybean Summary-
The soy complex closed sharply higher on Tuesday, with spot bean futures reaching their best level since late 2023 on a combination of fund buying and bullish tailwinds from yesterday afternoon's EPA headlines. The latter, along with another flash bean sale to China, dominated chatter throughout most of the early morning, but it felt like there was more to today's surge higher than just that as speculative money poured into the space. Whether 2027 and 2028 RVOs are going to get increased as a result of yesterday's SRE decisions from the EPA remains to be seen, but the way the market acted today makes it at least seem as though traders view the proposal as somewhat possible.
Wheat Summary-
It was more of the same in the wheat market on Tuesday, with Chicago futures again scoring new highwater marks on another day of headlines related to missile and drone attacks between Russia and Ukraine. Putin has made it clear that he has zero intention of signing up for any sort of grain corridor in the Black Sea, which means the war is likely to drag on and continue impacting supply flows. Both sides are finding alternate routes to export, but capacity is severely restricted and the cost to the farmer is much higher. Harvest in the region is underway now, but the focus is slowly going to shift to what happens next year if the current situation persists. Between sharply higher fertilizer costs and now also sharply higher export costs, it would not be surprising to see farmers in both countries reduce planted area in the year ahead. Happenings in the Black Sea are not just short-term market impact.
Outside News Headlines-
Crude oil futures up $4.00+/bbl.
Weather Updates-
The mid-day GFS run on Tuesday tried to shift ridge-riding thunderstorms slightly further south than previous this week, though confirmation of such a shift is awaited from the new EU model run later this afternoon.
Otherwise, the overall pattern for the rest of the week is little changed, with a large high pressure ridge across the southern US keeping much of the country's mid-section warm and dry.
Week two precip forecasts trended noticeably wetter over the last 24 hours, as a big low pressure trough currently in the northwest pushes into the mid-section of the country and shifts flow back to the southwest. However, at 270 hours out in the forecast, confidence is not overly high in the outlook.
Temperature forecasts into mid-month will also be predicated in large part on how the upper atmosphere progresses, but today's GFS ensemble run is cooler than the EU's for much of the Midwest as heat is pushed back south and west.
Enjoy it!
Bailey Runyen
Grain Originator | Topflight Grain Coop.
101 N. Main St. | Cisco, IL 61830
Phone :: 217-669-2141
Email :: brunyen@tfgrain.com
