Closing Markets: Corn: -2.75.
Beans: -6. Wheat: -5.75.
Good evening!
Market Recap-
Ag markets in Chicago drifted to lower closes on Wednesday, led to the downside by the bean oil market which gave back all of what it gained on yesterday's EPA news and then some. Traders quickly realized between yesterday and today that while there's a chance 100% of the previously waved small refinery exemptions get passed on to larger refiners, there also exists, though maybe not at equal odds, a similar chance that 0% of these exemptions get passed on, which produced today's sell-off. In either case, a final ruling does not feel any much closer today than it did yesterday, which means bio and renewable fuel producers are likely to keep operating in the dark for the foreseeable future despite sharp futures price reactions the last couple days.
Corn Summary-
Corn futures were a follower on Wednesday, as lower price action in the energy markets of crude oil and bean oil helped drive values lower on one hand, while a declining wheat market helped to add pressure in the other. We don't have a lot new to report this afternoon harvest-wise, with yields still coming in generally 10-20 bu below last year, but being highly variable. There's a pocket in northwest IA that is reporting yields that are up notably from last year, but keep in mind this area had all sorts of moisture issues from spring on last year which led to losses. Otherwise, it would seem Wednesday was a breather day for a market that just hasn't seen a lot of fresh input besides harvest activity and mostly groundless yield debate in the past few weeks.
Soybean Summary-
Like we said at the top, focus in the soy complex for Wednesday was squarely centered on the bean oil market for a second consecutive session, as speculative and algorithm traders continued to push this market around based on the latest EPA headlines and a gradual understanding that yesterday's rally was likely taken too far, too fast based on what we learned (or didn't learn) from the afternoon announcement. Regardless of what ends up getting decided, there remains a considerable amount of time (likely months) before any sort of ruling is made final, which means prices will continue to be subject to increased headline risk in the short and medium term.
Wheat Summary-
We continue to have little new to talk about in the wheat market for Wednesday, as Canadian production numbers were largely as expected and there weren't a lot of global market happenings to push prices one way or the other. There are rumblings on social media that perhaps crop sizes are possibly not as big as the market is trying to make it seem and that this could possibly be reason for the general lack of farmer selling out of both Europe and the US.
Outside News Headlines-
Crude oil futures down $0.50+/bbl.
Weather Updates-
The GFS is wetter further east into next week than was seen yesterday, but is otherwise unchanged for the west in continuing to offer fairly regular precip potential over the next 7-10 days. Totals through the end of the week next week are seen in a general range of 1-3", but exact locations and totals will likely be spotty.
A small pocket of cooler air will linger in the west-central US for 48-72 hours the next couple days before warming again into the weekend, while the rest of the Midwest and eastern US stays warmer than average into next week.
There continues to be poor model agreement on the week two precip outlooks this afternoon, with the EU AI model continuing to be the wettest of the bunch for the Midwest, the GFS the driest, and the EU somewhere in between. Our lean is to the EU model, which has been the most accurate through summer.
Extended range temperature forecasts are continuing to show cooler air slowly working into the far western US and western Canada, but are otherwise unchanged for the eastern US in continuing to show mostly above average temperatures into the end of the month.
Enjoy it!
Bailey Runyen
Grain Originator | Topflight Grain Coop.
101 N. Main St. | Cisco, IL 61830
Phone :: 217-669-2141
Email :: brunyen@tfgrain.com
