We kicked off the day with MBA Mortgage Refinance Index, MBA Purchase Index, and MBA Mortgage Applications at 6:00 A.M., S&P Global Composite PMI Flash, S&P Global Manufacturing PMI Flash, and S&P Global Services Flash at 8:45 A.M., New Home Sales and New Home Sales MoM at 9:00 A.M., EIA Energy Stocks at 9:30 A.M., 2-Year FRN Auction and 17-Week Bill Auction at 10:30 A.M., 20-Year Bond Auction, Building Permits Final, Building Permits MoM Final, and Jackson Hole Symposium at 12:00 P.M., Cold Storage and Dairy Products Sales at 2:00 P.M.

Photo by Jesse Gardner on Unsplash

On the Corn Front signals are coming from the PROFARMER CROP TOUR which broke the market in Monday’s session and with agriculture markets struggling at the end of summer and corn prices are not at fair value. With corn slipping to multi-year lows, while wheat is just above the May low. The wheat market paced declines in the first half of the year and, at the lows was down 45% from last year. This was the largest 1-year price change since 2009 and the 2^nd largest since 1980. (The Russian Grain Embargo). The market has been trying to carve out a long-term low, but political headlines continue to add to price volatility. However, the open interest in wheat has been steadily building and is now 28% larger than a year ago. The corn market is down 31% from a year ago and the most oversold since June 2014. Since 1980, there have been just a handful of months that the corn market was lower on a percentage basis. Corn open interest is also on the mend and is now 1%higher than a year ago. Rallies have repeatedly failed due to limited fund participation and open interest, but relative cheapness of grains to other commodities/asset classes is expected to attract outside fund money. Any talk of the possibility reopening of the Black Sea Grain Initiative to move grains looks like a dead deal as Russia and the Ukraine traded volleys of drone strikes over the night. In the overnight electronic session the December corn is currently trading at 480 ¾ which is 1 ½ of a cent higher. The trading range has been 483 ½ to 478 ½.

On the Ethanol Front Eliza Petry reports Tar Spot Detected Throughout the Midwest and Ethanol Production Ramps Up. When humidity ramped up this summer farmers worried about the chance of their fields to be affected by tar spot a crop disease that spreads through moisture in the air. Farmers worries have come to life as tar spot has been reported throughout the Midwest Illinois currently has seven counties that have reported tar spot, and Missouri has twelve counties. Iowa is struggling with thirty-six counties having tar spot showing up in their fields. This coming week, the forecast is bringing in more humidity, which means the disease will easily continue to spread throughout the farmers fields. This month ethanol production in the Midwest has reached, a three-week high. Production rose from 1.023 million barrels a day, to 1.069 (mbd), which is a 46,000 barrel difference. This come as demand for ethanol continues to rise. But with demand for ethanol, there comes a demand for corn, so lets hope everything our farmers have been through throughout this season, they’re able to keep up with demand. There were no trades or open interest in ethanol futures.

More By This Author:

Gas Grocery Prices & Inflation Out Of Control. The Corn & Ethanol Report
The Corn & Ethanol Report: Pro Farmer Crop Tour This Week
The Corn & Ethanol Report: Global Consumption-Weather & Yields