Takeaway

The presenter sees a divergence in the grain complex, with wheat's fragility on Black Sea headlines pulling corn lower. However, he argues soybeans are fundamentally supported and bounced on very strong new-crop export demand, which may insulate them from the broader profit-taking seen in other grains.

What the presenter said

• The presenter notes that wheat experienced a significant, fragile sell-off, erasing a third of its recent gains in a single day on headlines about a potential Black Sea peace deal. [00:30, 00:58]
• He assigns only an 8% probability to a peace deal materializing, citing Putin's previous opposition. [01:16]
• Corn followed wheat's sell-off, but the presenter expects both corn and soybeans to be ahead of the USDA's old crop export estimates next week. [01:57]
• The market has likely already priced in yield reductions, according to the speaker, citing an Allendale survey that suggests a 2-bushel hit to corn and a 0.1-bushel hit to soybeans. [02:51]
• The presenter believes significant corn yield losses are concentrated in non-Midwest states like Texas, Oklahoma, and Georgia, as the USDA already accounted for issues in the Western Plains in its August report. [04:10]
• Soybean export sales are described as very strong, with 36% of the USDA's full-year goal already sold. [07:40]
• He highlights non-US supply concerns for oilseeds, including reduced fertilizer application in Brazil and El Niño's potential impact on palm oil in Southeast Asia and weather in Argentina. [06:40]
• In livestock, the presenter saw cattle's up day as short covering and noted the market remains in an orderly downtrend, while hogs took a break but are still in a strong seasonal buying pattern for October. [09:40, 11:40]

Trade ideas

The presenter put forward no actionable trade ideas. His market view is that wheat is fragile and headline-driven, while soybeans are supported by strong export fundamentals. He suggests a strong seasonal buying pattern remains for hogs despite a down day.

Levels and data cited

Price Levels * October Hog futures: The presenter noted an intraday chart gap waiting to be filled at 81.90.

Data Cited * Allendale survey: Suggested a yield hit in the last two weeks of August of about 2 bushels for corn and 1 bushel for soybeans. * USDA September WASDE: The market is anticipating a corn yield estimate around 178.7 bushels/acre and a soybean yield estimate down 0.1 bushels. * USDA August WASDE: Had already shown a 13% corn yield reduction for Kansas and 12% for North Dakota. * USDA Soybean Exports: New marketing year sales are at 36% of the whole year's goal, with 14 million tons booked to China and unknown destinations. * World Health Organization (WHO): Reiterated the El Niño story on the day of the video.

Risks and what would invalidate this

• Skepticism about a long-term narrative change based on Putin's comments regarding a peace deal.
• The fragility of the wheat market, which is susceptible to quick sell-offs.
• Uncertainty around the USDA's upcoming adjustments to new crop crush and yield estimates.
• The potential for a moderate break in soybeans over the next 30 days.
• The cattle market remains in a downtrend and would need a $2 move to signal an end to the selling.