Missed some market news this week? Here's what Bryce Knorr and Ben Porter reported on the markets this week.

Morning audio by Bryce Knorr

Grain markets this morning are licking wounds from Friday’s bearish USDA stocks reports, trying to hold a little higher. While huge supplies hang over prices, stronger basis for corn and soybeans in the export pipeline last week was a positive note. Rains working through the Midwest and Plains this week could slow harvest, keeping hedge pressure from overwhelming futures as well. Outside markets are on a roll, supported by agreement to fold Canada into a trade deal with the U.S. and Mexico to replace NAFTA. 

Euphoria gripped the market on Monday after Canada agreed to join the U.S. and Mexico in a trade agreement to supplant NAFTA. But grain futures started to fade gains before the close yesterday and that negative tone followed through to the overnight session today. Stock markets around the world also retreated when old worries about Italian debt and the trade dispute with China returned to cast a pallor. Crude oil bulls are still running, however, sending futures above $75 because traders believe world supplies will tighten as U.S. sanctions remove Iranian oil from global trade. 

The first week of October on average sees corn and soybean futures making harvest lows. But futures are moving higher so far as it looks like the markets made lows early in Mid-September. While the first weeks of harvest were earlier than normal, combines could slow over the next couple weeks as rains linger over the Plains and Midwest. Slower hedge pressure along with technical buying from funds covering bearish bets firmed prices overnight. 

The dollar is stronger, adding to gains thanks to rising U.S. interest rates providing a safe haven for investors worried about everything from trade to global politics. While stock markets sold off around the world, futures on corn, soybeans and wheat are a little higher in quiet trade. Export sales data out this morning could change that mood, as harvest pressure eases with storms bringing heavy rains to the Midwest and southern Plains over the next couple of weeks. 

Grain markets were subdued in fairly quiet trading overnight after getting a boost Thursday from strong export sales of corn and soybeans. December corn futures traded within a tick of their July high, resistance that could set up selling opportunities in October if breeched. Wall Street is bracing for September employment numbers due out at 7:30 CDT, with expecations clouded by the hard to predict impact of Hurricane Florence. 

Feedback from the Field

With harvest picking up speed last week, farmers liked what they found. Growers reporting Feedback From The Field for the first time rated crops and yields better than the USDA reported both in its Crop Progress report and Sept. 12 production estimates. 

ARC payments

USDA has released details of payments growers will receive under the ARC-County farm program, and as expected, fewer farmers are getting checks and those that do will be paid less.

Exports

Grain exports managed decent numbers last week, according to the latest USDA export inspections report, out Monday morning. Results were mostly solid – even without a major export market present, according to Farm Futures senior grain market analyst Bryce Knorr. 

For the week ending Sept. 27, grain export sales exceeded trade expectations, although some totals slipped from the prior week. The big loser remains sorghum. China again bought nothing last week, though Mexico added a few sales.

There were two export sales this week. The Philippines bought soybean cake and meal and Japan bought corn. 

Crop Progress

Corn and soybean harvest have passed or neared the quarter-complete milestone, while winter wheat planting progress nears the halfway mark, according to the latest USDA Crop Progress report.

Friday’s market reports

Grain futures are mostly steady to a little higher this morning, supported by stronger exports, rains delaying harvest and a wheat complex trying to prove it has more than short-covering strength. 

Weather-related harvest delays and export optimism were enough to keep grains pushing higher Friday, as corn settled into fractional gains, with soybean and wheat futures up another 0.5% to 1% in the session.

Outlooks

Fertilizer Outlook- Farmers know all too well how international events affect their pocketbooks. Yet another reminder of the global interconnections in agriculture came last week, rocking a fertilizer market that’s already rallied to multi-year highs. 

Basis Outlook- The cash market took some unusual twists for corn and soybeans last week, but China’s tariffs and larger than expected Sept. 1 supplies could provide tests for basis in October. 

Soybean Outlook- It’s hard to put a bullish spin on the soybean market right now, though fundamentals may not be quite as bad as they seem. But USDA’s bearish Sept. 1 stocks estimate was more bad news a market flooded with it doesn’t need. 

Wheat Outlook- Whether you follow fundamentals of supply and demand or make marketing decisions based on technical analysis of price charts, there’s plenty of reasons to be nervous headed into USDA’s Oct. 11 supply and demand reports. If wheat is going to rally this fall it’s likely time for the market to put up or shut up. The government’s updated estimates of supply and demand may not make that any easier.

Corn Outlook- USDA gave growers two bearish reports in September, and anther could be coming Oct. 11, when the agency updates estimates for 2018 production, supply and demand. So, if you hadn’t looked at a price chart lately you might expect futures to be grinding towards harvest lows. 

Energy/Ethanol Outlook- Growers needing fuel to harvest and dry big crops this year face higher costs, and fuel bills likely won’t get any cheaper in 2019. In fact, the only cheap fuel these days is the one farmers produce: ethanol. Prices for the biofuel remain near the lowest level since the corn-into-energy boom began more than a decade ago.

Financial Outlook– Bears may own the grain market right now. But on Wall Street, bulls are running. Both the S&P 500 and Dow Jones indexes soared to record levels on Thursday. Strong corporate profits and a 48-year low in jobless claims propelled Wall Street, despite angst over trade disputes, high energy prices, emerging market troubles and all-but certain interest rate hikes from the Federal Reserve.