On The Money Grain Commentary 9-23-21

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Corn Outlook:

Traders are taking a cautious approach to the grains because of the recent instability in the financial markets. They are unsettled from concerns that the Evergrande Group, the world’s most indebted real estate developer in China, might default on their loans which would send shock waves throughout China’s banking system. This would be the equivalent of the demise of Lehman Brothers in 2008. Furthermore, the Fed has signaled that they may begin raising rates in 2022, and the debate for raising the U.S. debt ceiling looms. Meanwhile, corn harvest is getting into full swing and is 10 percent complete versus 9 percent for the average with varied yields being reported. In other developments, operations in the Gulf are slowly being restored with export inspections last week at 15.8 MB. However, there is a lot of catching up to do to meet USDA’s target of 2.475 BB.

Bean Outlook:

The focus in soybeans is on China as they are the largest buyer of U.S. soybeans. If the Evergrande Group defaults on their debt causing a contraction of their economy, it will put a damper on their imports. In other developments, 6 percent of the soybean crop had been harvested which is par for the average. Meanwhile, export inspections were 10.1 MB and should improve as the Gulf port comes back online. Planting begins soon in Brazil which means that all eyes will be on their weather and growing season this fall and winter.

Wheat Outlook:

Winter wheat planting is off to a solid start at 21 percent done versus the average of 18 percent. Showers are forecast for the next few days which should facilitate emergence. In other developments, export inspections last week were 20.7 MB and above the average needed to reach USDA’s target of 875 MB. The pace of shipments has fallen since mid-August but remains on track for 880 MB. Meanwhile, there are rumors circulating that Russia may limit their exports to less than 30 million tons.

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