Inside this issue

Weekly Price Change .................. 2

Drought Outlook…….………………...3

7 Day Precip ................................ 3

6-10 Day ..................................... 4

8-14 Day ..................................... 4

Exports ....................................... 5

Technicals ................................... 6

October 2, 2020

As of:

9/27/20

Corn Soy-

beans

Wheat

Long/

Short +107K +229K +12K

Change +11K +18K -2K

Record

Long +429K +254K +81K

Record

Short -322K -168K -162K

Commitment of Traders

Managed Money Fund Positions

Market Summary

Ag prices were off to the races again this week—this time spurred by surprisingly bullish quarterly stocks numbers that were released on Wednesday morning. Corn and soybeans fin-ished the week up 14 and 17 cents, respectively.

For corn, actual Sept 1 stocks came in at 1.995B bushels - well below the average trade guess of 2.25B bushels. This is the lowest corn carryout since 15/16’s 1.7B bushels carryout. There isn’t anything overly bullish about a 2B bushel carryout, but it does make 20/21’s carryout much less burdensome.

The 2020/21 corn carryout now drops to 2.245B with the low-er carry-in from the Sept 1 stocks adjustment. It certainly puts extra emphasis on 2020 crop production, as well as South American agronomic conditions (currently very dry).

For beans, stocks came in at 523MM bushels which was 53MM bushels below the average trade guess. This is the second largest trade miss in history—only trailing last year’s down-ward miss of 69MM bushels. Last year’s soybean production was lowered by 333,000 bushels.

NASS released their August grain crush report on Thursday, which showed that US ethanol plants crushed 411MM bushels of corn during the month of August. More importantly, this puts closure on final corn crush for the 19/20 crop year at 4.851B bushels. The USDA is currently estimating 4.855B bushels—so a slight downward adjustment is coming in next week’s WASDE report.

The USDA will release the October WASDE report next Friday. As mentioned, the carryout will see an immediate decrease based on the lower carry-in reflected in the stocks report, but there will certainly be some changes to production as well, with many expecting yield to decrease based on the late sea-son dryness. It should prove to be another volatile week!

Weekly Price Change:

2

10/2/2020 Price Change % Change

Corn December 2020 $3.7950 $ 0.1425 3.9%

Soybean November 2020 $10.2000 $ 0.1750 1.7%

Wheat December 2020 $5.7325 $ 0.2900 5.3%

Feeder Cattle Front Month $139.75 $ (0.40) -0.3%

Live Cattle Front Month $111.10 $ (0.30) -0.3%

Lean Hogs Front Month $62.48 $ (1.95) -3.0%

Crude Oil WTI Front Month $37.17 $ (3.08) -7.7%

U.S. Dollar Index Front Month 93.9 $ (0.81) -0.9%

DJIA 27,703 660 2.4%

U.S. Drought Outlook

3

7 Day GFS Precipitation Forecast

4

8 to 14 Day Forecast

6 to 10 Day Forecast Temperature Precipitation

Temperature Precipitation

Export Sales—Week 4

Export Inspections—Week 4

Export sales for the 2020/2021 crop year remain very strong. This week’s sales came in at 80 MM bushels,

which was about 44% greater than the estimate high. Export sales now stand at 969MM bushels for

2020/2021, which remains a record by about 123 MM bushels vs any other year at this point of the mar-

keting year.

Export inspections came in at 31.7 MM bushels this week—with Mexico and China the main destinations.

With about 6% of USDA estimates for 2020/2021 accounted for, 45.36 MM bushels per week will be needed

to meet USDA expectations.

Technicals It was a very good week for corn bulls, with prices achieving new highs post-stocks report. The first level of

support rests at $3.77-3.78, with further support at the rising trendline near $3.65. Prices have now re-

traced more than 61.8% of the 2019 high to August 2020 low. First level of resistance rests at $3.85 which is

Thursday’s high, followed by $3.88-$3.90.