Takeaway

The presenter argues for a bullish outlook across the grain complex, driven by weather-related yield concerns, strong demand, and geopolitical risk. The key takeaway is the counter-seasonal rally in soybeans and new contract highs in corn, as the market prices in a smaller US crop and anticipates further upside based on supply constraints.

What the presenter said

• Soybeans are in a significant rally, hitting new contract highs, in what the presenter calls a rare counter-seasonal move for this time of year. [00:28, 02:24]
• Lower crop ratings and delayed maturities point to a smaller soybean yield, which recent weather improvements are unlikely to significantly impact. [00:40, 00:57]
• Demand for soybeans remains strong, supported by continued buying from China. [01:09]
• Corn has also reached new contract highs as the market prices in a smaller yield, with current weather doing little to improve crop conditions. [03:09, 03:29]
• The market anticipates lower corn yield numbers in upcoming USDA reports, particularly in October. [03:54]
• Wheat is gaining a risk premium from Black Sea export disruptions and dry conditions in the US Southern Plains and the EU, which are impacting winter wheat planting prospects. [07:04, 07:59]
• Crude oil pushing towards $90 is contributing to inflationary pressures across the grains. [05:07]

Trade ideas

None stated. The presenter's market view is bullish across soybeans, corn, and wheat, anticipating further price increases based on supply constraints and continued demand.

Levels and data cited

Price Levels: * November Soybeans: Support above $13.00, with resistance at $13.20. A close above $13.20 opens the door to the next target of $13.50. * Corn: Resistance at the "$5.50 big, fat, round psychological level," which is also a 38% retracement from the $8.00 old highs. The next target is $6.00, which the presenter believes could be reached quickly. * Crude Oil: Pushing the $90.00 level.

Data Cited: * USDA: Lower crop ratings and expectations for lower corn yields in the September and October reports. The end-of-September quarterly stocks report for corn is also a key factor. * China: Mentioned for making soybean purchases of 5 million bushels "this morning." * EPA: SRE decision regarding the reallocation of RINs was cited. * Geopolitical/Weather: Expected lower winter wheat planting in Ukraine, and very dry conditions in the US Southern Plains.

Risks and what would invalidate this

• Geopolitical risk in the Black Sea affecting wheat exports.
• Adverse weather conditions (dryness) impacting soybean, corn, and wheat yields.
• Inflationary pressures from rising crude oil prices.