A minor wild and woolly night as grains opened higher, immediately reversed lower, then found the trade trend reversing around unchanged numerous times. This means the trade has turned consolidative after Friday’s September WASDE report. While several changes were noted to balance sheets, almost all were within expectations. This was especially true on corn, where the US yield was trimmed 2.5 bushels per acre, but in true USDA fashion, corn demand was cut as well. Feed and residual demand were both lowered on corn, which is where reductions are first seen. No major changes were made to US soybean balance sheets, but enough was seen to trim stocks-to-use to a 4-year low and warrant risk buying. No changes were made to US wheat balance sheets, but the USDA still raised the average cash value of the crop as they see strength in corn benefiting all grains. Global wheat demand is building, giving the complex more support.

Now that the WASDE report is out of the way, the next focal point will become the stocks data on September 30. That means the next two weeks we will trade early harvest reports and every geopolitical headline that the Algo readers will enjoy daily bumps and dumps with. Flash sales for soybeans should continue into September 24, despite continued friction between the US and China over Taiwan. China continues to buy US beans, with purchases now approaching half of its 25 MMT commitment.

Spot crude oil prices are again back above $100 with the short-term target of 105. This contract expires in under 10 days, and November is trailing by a $4.00+ discount. Soybean oil was not very responsive last night to the higher prices, along with corn struggling with harvest pressure. Both corn and soybeans are dealing with higher open interest than normal, which increases volatility, but contrary to popular belief, not necessarily the threat of a top. With the September carryout data lowered Friday, the statistical likelihood of it occurring again in October is very high, with the trend toward tighter grain stocks continuing into the January crop report.

South American crop planting is getting started in Mato Grosso, with some light rain showers giving hope to get underway. The Super El Niño effect on this region will be measured later in October/November if the typical monsoonal rains are reduced. This effect also produces excessive rain on the southernmost point of Brazil in Rio Grande do Sul. Remember, grain production in South America is from north to south. Argentina doesn’t typically start planting their soybeans until later in November and into December.

Despite all the recent optimism over Russia/Ukraine peace talks, the attacks continue. The next round of US-backed talks could come in October, although nothing has been formally scheduled yet. Ukraine says it is preparing for renewed three-sided talks involving the US and Russia, while the Kremlin says it is still too early to confirm when or where they might occur. President Trump has now asked Ukraine to stop attacking Russian diesel infrastructure as those strikes contribute to tightening global fuel supplies. For now, though, nothing has been agreed to and the Black Sea remains very much an active war zone. The wheat importer pinch is just around the corner.

All grains are holding their defined support zones, which offer bounces if headlines are provided. Dec corn 521-526, November beans 1290-1300, December Chicago wheat 710-720.