Listen to today's audio below - What if we don't go into a recession?

Futures Prices Close

Overview
We saw small gains in soybeans and corn, while wheat was again sharply higher. The stock and equity markets were higher as well. Led by signs of weakness in the U.S. dollar. With Dow Jones +2% higher and crude oil up nearly $4 at +5%.

Friday we will see the USDA Quarterly Grain Stocks Report. No major changes are expected but we could definitely see some surprises.

Today's Main Takeaways

Corn
Corn closed up +3 cents on the day and finished near the top of its trading range, after a choppy day of trading. A lot of support came from the strength we saw in the wheat market. Grain markets were finally supported by the outside markets for a change. Where we saw a spike in crude oil, Dow Jones was strong, and the U.S. dollar was finally lower.

Putting pressure on the markets, we have to take a look at the window of opportunity we are seeing for producers in the U.S. to increase harvest pace. Yes, currently harvest is slightly behind, but most could make the argument that we will see a jump in progress as the weather looks to be pretty cooperative.

Today we saw the dollar lower for the first time in a while. As the dollar was down -1.29%. This added support and it relieved some fear from buyers today. But overall the hot dollar has been a very negative factor for not only the stock and equity markets but the grains as well. Demand uncertainty has also been a negative factor, and will likely continue to be a concern unless we find reasons to be optimistic about demand increasing.

Nobody really knows how the Russia and Ukraine situation will play out. So as of recent, that will always be somewhat of a wildcard depending on the actions Putin decides to take.

EIA reported that ethanol producers averaged 855,000 barrels per day through the week ending in Sep. 23. Which was the lowest we've seen since Feb. 26th, 2021. This implies the lowest corn production as well.

Ethanol stocks were up +190,000 barrels to 22.691 million

Looking forward to Friday's USDA report where we will see the Quarterly Grain Stocks Report. Analysts are expecting to see some tightening. As they have expectations for 2021/22 final corn carryout set at 1.495 billion bushels. In the WASDE report the USDA was expecting 1.525 billion bushels. So a 30 million bushel decrease. Last year we saw 1.235 billion bushels.

Dec-22 (6 Month)

Soybeans
Soybeans were just higher, with Nov-22 contracts ending the day up by just 3/4 of a cent. We were lower for the majority of the day, with soybeans breaking around 18 cents lower early in the day but saw a nice bounce in the afternoon. Recovering those early 18 cent losses. With crude oils rally providing support. As crude oil rallied 5%. Soymeal also bounced near close but still finished lower on the day.

We don't really have any new news to help push prices higher currently. Similar to corn, the weather in the U.S. looks pretty good for harvest, so harvest is expected to pick up on a faster pace. Which will add some additional pressure to prices with no real weather scare.

As mentioned previously, the dollar was weaker today which helped prices. But the recession concerns and overall very strong dollar are putting pressure on all the markets. We also haven’t seen any more demand out of China.

Its a tad early, but everyone's focus is starting to shift away from U.S. weather and more towards South America weather as planting gets underway. Forecasts are actually showing a lot of rainfall in important growing regions in Brazil. If weather holds we could see a very large crop.

The average estimate for Friday’s report for 2021/22 soybean carryout is 243 million bushels. The USDA WASDE had 240million bushels. We will see the NASS release their count on Friday.

Support still remains around the $13.90 to $14 range. The bulls are hoping this support holds as we are still very close to that $14 level and bounced at $13.90 3/4 on today's lows. Soybeans are down over 50 cents the past five sessions.

Soymeal & Soyoil

Soymeal down -0.9 to 412.7
Soyoil down -0.24 to 62.15

Soybeans Nov-22 (6 Month)

Wheat
Wheat saw another strong day, with wheat futures all rallying upwards of 30 or so cents on the day. Chicago closed over 40 cents off its early session low. The weaker dollar added a ton of support to prices, as it was down -1.29%. Relieving some recession concerns compared to yesterday.

The Russia and Ukraine news, even though has some extreme uncertainty, has been supportive of wheat prices. As any news on the situation has been a market mover for wheat.

However, we can't trade the war headlines forever. One might think that further escalation will lead to higher prices, which may true. But on the other hand, any news of resolution will cause the opposite reaction. We also have to keep in mind that wheat prices are down nearly $4 since the initial war news broke out and sent wheat soaring back in May.

Friday we will see the 2022/23 wheat production update. Expectations are 1.784 billion bushels.

Chicago Dec-22 (6 month)

KC Dec-22 (6 month)

MPLS Dec-22 (6 month)

Other Markets

Crude oil up +3.90 (+5%) to 81.87
Dow Jones up +549 (+1.88%)
Dollar Index down -1.477 (-1.29%)
S&P 500 up +1.97%

News

Leaks in two major pipelines for transporting gas from Russia to Europe sent gas flooding into the water yesterday. Europeans quickly pointed at Russia for sabotage.
Hurricane Ian has reached Floridas west coast. Categoried as a category 5 hurricane.
Crude oil notches highest daily gain in 10 weeks
White House says if Russia moves forward with annexation they will be prepared
White House announced a $1.1 billion package of weapons and equipment for Ukraine

Yesterday’s Audio

Can grains separate themselves from the stock market? - Listen below

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