Corn crop estimate: 14.900 bil. bu.USDA’s corn crop estimate is down 378 million bu. from August and right in line with the average pre-report esti-mate. USDA estimates the corn yield at 178.5 bu. per acre, down 3.3 bu. from last month. USDA cut harvested corn acreage by 550,000 acres to 83.473 million acres, with all of that reduction coming in Iowa.

USDA’s initial objective yield data showed the second most ears per acre in the 10 survey states, behind 2018.

Bean crop estimate: 4.313 bil. bu.USDA’s soybean crop estimate is down 112 million bu. from last month but 18 million bu. higher than traders expected. USDA estimates the yield at 51.9 bu. per acre, down 1.4 bu. from last month. USDA did not change harvested bean acres.

USDA’s initial objective yield data showed the second most pods per 18 square feet in the 11 survey states, behind 2018.

NASS to resurvey Iowa harvested acres in OctoberMany Iowa producers indicated they were still finalizing

decisions on wind-damaged acres, so NASS will resurvey for the October report. NASS also says any impacts from last week’s frost/freeze will be reflected in future reports.

Cotton crop: 17.064 million balesUSDA’s cotton crop estimate is down 1.016 million bales from last month and 506,000 bales less than the average pre-report estimate. USDA lowered the estimated yield by 28 lbs. from last month to 910 lbs. per acre. USDA cut har-vested cotton area by 242,000 acres to 9.005 million acres.

La Niña likely to last through winter The U.S. Climate Prediction Center (CPC) says La Niña con-ditions are present and there are roughly 75% odds the weather event will continue through winter. CPC says most of its models favor a borderline moderate La Niña event persisting through February. La Niña weather patterns increase odds of above-normal temps and below-normal rainfall across much of Argentina and southern Brazil.

Corn, soybeans extend rallies — December corn futures rallied to their highest price since late-March and November soybeans challenged their June 2018 high ahead of Friday’s USDA reports. Besides anticipation of lower crop estimates from USDA, strong Chinese buying fueled both markets. While momentum is squarely with bulls, funds are now long corn and hold a big net long in soybeans. We advise you to use the price strength to advance sales. Wheat futures traded sideways to higher. Cattle futures worked higher on light correc-tive buying, but it’s going to take strength in the cash market to confirm a low. Front-month hog futures surged to their highest level on the continuation chart since mid-May as news of a case of African swine fever in Germany fueled hopes for more U.S. pork exports to China.

Trump to EPA: Reject gap-year SREs President Donald Trump reportedly has instructed EPA to deny the so-called gap-year small refinery exemptions (SREs) for compliance years 2011 through 2018. A White House contact again signaled to watch Trump’s next visit to Iowa. That clearly suggests the president wants to make an official announcement in the state with Sen. Joni Ernst (R-Iowa), who is in a close re-election race with Democratic challenger Theresa Greenfield, beside him.

Possible U.S./Mexico corn disputeSome sources signal a high-level official in Mexico wants to halt imports of U.S. biotech corn and that Mexican President Andrés Manuel López Obrador is considering the request. If acted on, this would be a major issue relative to implementa-tion of the U.S.-Mexico-Canada Agreement and would draw attention from U.S. farm groups and farm-state lawmakers.

GOP’s ‘skinny’ Covid aid blocked A $300-billion Covid-19 relief bill backed by Republicans was halted in the Senate by filibuster after failing to receive 60 votes. White House officials have signaled they might be willing to go as high as $1.5 trillion on the next Covid-19 aid package. But GOP leaders are growing increasingly pessi-mistic about any deal with Democrats before the election.

For the ag sector, USDA can tap the Commodity Credit Corporation (CCC) for initial aid. Congress could replenish CCC funds via a continuing resolution later for perhaps another round of aid and for traditional farm program pay-outs. Sources tell us the next Coronavirus Food Assistance Program (CFAP 2) will be based on revenue and not prices, unlike CFAP 1 that is based on prices.

PLC yield update deadline is Sept. 30 The deadline to make a one-time update to Price Loss Coverage (PLC) program yields for covered commodities is Sept. 30. Those yields will be used to calculate the PLC payments for 2020 through 2023. Producers who elected Ag Risk Coverage can still update PLC yields.

News this week...2 — Growing season ends early in Canada, northern U.S. 3 — German ASF case could spur more U.S. pork demand.4 — Analysis of the September WASDE Report.

September 12, 2020 Vol. 48, No. 37

Go to ProFarmer.com

September 12, 2020 / News page 2

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@ChipFlory@JWilson29

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Chinese soy imports slowed in AugustChina imported 9.6 MMT of soybeans in August, down 4.8% from July as shipments from Brazil slowed. But Chinese soy-bean imports last month were up 1% from last year. Through the first eight months of 2020, China imported 64.7 MMT of soybeans, a 15% surge from the same period last year.

Chinese inventories of soybeans and meal are bulging after aggressive soybean imports this summer. The bulk of fall arrivals will be from the United States. Industry sources tell us Chinese buyers have soybean needs booked into January. Price differentials will determine when Chinese buyers switch from U.S. soybeans to Brazilian new-crop supplies.

China’s exports surge, imports slowChina’s overall exports surged 9.5% in August — the third straight month of year-over-year increases. However, Chinese imports dropped 2.1% last month. That left China with a trade surplus of $58.9 billion, down from $62.3 bil-lion in July. Its trade surplus with the U.S. widened to $34.2 billion in August from $32.5 billion in July.

Brazil to extend ethanol import quota The Brazilian government reportedly is planning to extend a tariff-free ethanol import program for three months. A three-month extension would push trade negotiations between the two countries past the U.S. elections in November. Brazil’s sugar industry wants the country to negotiate a trade-off for a reduction in tariffs on Brazilian sugar exports to the United States.

Ethanol exports to Brazil (and others) had already slowedThe U.S. exported just 74 million gallons of ethanol to all

destinations in July, down 38% from last year and the low-est total for the month in six years. Virtually no ethanol was shipped to Brazil in July — before the country let the quota expire at the end of August that allowed up to 750 million liters (198 million gallons) of ethanol imports per year free of tariffs.

Even with an extension of Brazil’s tariff-free import sys-tem, demand is not likely to be strong. The combination of Covid-19 demand destruction, increased Brazilian ethanol production and the sharp drop in the country’s currency have reduced import demand. Plus, Brazil imported 177 mil-lion gallons of U.S. ethanol in the first seven months of this year, meaning only 21 million gallons remain duty-free.

Brazil temporarily scraps rice tariffs Brazil is eliminating tariffs on 400,000 MT of rice imports from the U.S. and Thailand through Dec. 31. The head of Conab says the country also should consider temporarily scrapping the 8% tariff on corn and soybean imports.

Corn, soybean ratings drop furtherUSDA shaved another point from its “good” to “excellent” ratings for both the U.S. corn and soybean crops. As of Sept. 6, 61% of the corn crop and 65% of the soybean crop were rated in the top two categories. On the weighted Pro Farmer Crop Condition Index (CCI; 0 to 500 point scale, with 500 being perfect), the corn crop slipped another 1.9 points to 355.8 points, which was 13 points below the five-year average for the beginning of September. The soybean crop dropped another 3.3 points to 357.5 points, which was equal to the five-year average for that date.

Cotton condition ratings improveUSDA raised its “good” to “excellent” rating for the cotton crop by two points to 45%. Our weighted CCI inched up only 0.7 point to 333.4 points, 11.7 points below average.

Cold temps clip Prairies, PlainsThe growing season ended early across the Canadian Prairies and portions of the U.S. Northern Plains and Upper Midwest with the arctic blast Sept. 8-10. World Weather Inc. says, “Corn, soybeans, flax and some late sea-son canola were most seriously impacted in Saskatchewan and western Manitoba. Many of the coldest areas in west-ern North Dakota and eastern Montana were among the driest and hottest areas of the northwestern Plains in recent weeks and that may have helped crops be more mature than usual and could have spared many from the potential devastating properties of recent freezes. Much of the soybeans and corn produced in Minnesota and the eastern Dakotas impacted by frost and freezing tempera-tures will impact crop quality more than production.”

Brazil raises soybean, corn cropsConab raised its official 2019-20 Brazilian soybean crop esti-mate to a record 124.8 million metric tons (MMT), up 3.9 MMT from its prior forecast. It increased the Brazilian corn crop estimate by 361,000 metric tons (MT) to a record 102.5 MMT. Despite the higher crop estimates, Conab kept its 2020 export forecasts at 82 MMT for soybeans and 34.5 MMT for corn.

Australia raises wheat crop forecastThe Australian Bureau of Agricultural and Resource Economics and Sciences raised its 2020-21 Aussie wheat production forecast by 2.2 MMT to 28.9 MMT. Australia’s wheat production is expected to increase 91% from 2019-20 and be 22% above the 10-year average.

September 12, 2020 / News page 3

First case of ASF in GermanyGermany detected African swine fever (ASF) in a wild boar near its border with Poland. Germany is Europe’s second largest exporter of pork and 61% of its shipments went to China in the first half of the year, accounting for 14% of total Chinese imports. Germany does not have a formal agreement with Beijing regarding ASF.

If China shuts off pork imports from Germany, the U.S. and Brazil are the most likely to bridge the supply gap. Spain, Denmark and France are already exporting about all they can to China and Poland is banned from shipping pork to China due to the presence of ASF in its country.

U.S. meat exports rebound in JulyPork exports were a record for July, while beef shipments were the strongest since March. U.S. pork exports totaled 554.7 million lbs., up 39.4 million lbs. from June and 13.4 mil-lion lbs. (2.5%) higher than last year. China was the key des-tination, accounting for 28% of all U.S. pork shipments dur-ing July. That more than offset lower exports to Japan and Mexico. For the first seven months of 2020, U.S. pork exports totaled 4.352 billion lbs., up nearly 24% from the same period last year. Exports to China accounted for 32% of the total and were up 268% from the first seven months of 2019.

The U.S. exported 251.7 million lbs. of beef in July, up 68.4 million lbs. from June but 22.0 million lbs. (8.0%) less than last year. From January through July, the U.S. shipped 1.628 billion lbs. of beef, down nearly 8% from the same period last year. While exports to Japan and Canada were ahead of year-ago, shipments to Mexico, South Korea, Hong Kong and Taiwan all lagged last year’s pace.

Chinese meat imports slow in AugustChina imported 832,000 MT of meat in August, a 17% retreat from the previous month and the lowest monthly tally since May. But for the first eight months of 2020, China imported 6.6 MMT of meat, a 73% surge from year-ago as the country deals with shortages caused by ASF.

Pork prices still elevating China’s CPIChina’s consumer price index (CPI) increased 2.4% over year-ago levels in August, driven by a 52.6% jump in pork prices. Chinese pork prices remain elevated, but that was the smallest year-over-year gain since August 2019. China’s non-food prices were up just 0.1% from last year.

China’s PPI stays weak, but improvingChina’s producer price index (PPI) fell 2.0% versus year-ago in August. Factory-gate prices have been under year-ago since January but August was the smallest drop in five months as industries continued to recover from the Covid-19 pandemic.

Producer Crop Comments...Please send crop comments to editors@profarmer.com.

Bremer Co. (northeast) Iowa:“Most of our corn is one-quarter to one-third milk line. Husks are brown and open, and lower leaves have dropped. It’s moving fast. We will start harvesting some that shut down early. It’s been a long time since we started corn before Sept. 15.”

Black Hawk Co. (northeast) Iowa:“Million dollar rain was a month late.”

Calhoun Co. (west-central) Iowa:“Our crops are dead and now it rains for 24 hours straight.”

Franklin Co. (south-central) Nebraska:“Dryland soybeans are running 30 bu. to 35 bu. per acre early on. Irrigated beans are still very green. Corn is moving along but dryland stalk strength is poor.”

Cass Co. (east-central) Nebraska:“If corn yields aren’t a record in this area, they will be close. August heat and dryness trimmed yields, but there’s still a lot of 200-plus-bushel corn out here. Soybeans really backed off yields with the August weather.”

Clay Co. (southeast) Nebraska:“Our 2.5 soybeans were about ready before the rains. The rains will help our 3.3 soybeans fill.”

Kittson Co. (northwest) Minnesota:“Our growing season ended with the freeze Sept. 8-9. Soybeans were close to mature before the cold temps.”

Cass Co. (east-central) North Dakota:“Spotty frost in our area. Still some green soybeans, but most had started to turn a pale color ahead of the frost. Hopefully the canopy retained some heat and protected them.”

Richland Co. (southeast) North Dakota:“We got down to 28°F. Corn is not black layered and soybeans are still green. Not good.”

Marshall Co. (northeast) South Dakota:“It got down to 30°F. There was only light frost, not a killing freeze, so crops should be OK. Corn still needs a few days to reach full maturity.”

Sedgwick Co. (south-central) Kansas:“Soybeans caught needed rains. The crop is in great shape around here and filling.”

Kit Carson Co. (east-central) Colorado:“I waited a bit too long. Corn is coming off at 9% mois-ture. Going to average between 55 bu. and 65 bu. per acre. That’s not as bad as I feared. Just one rain dur-ing grain fill would have been nice.”

Macon Co. (central) Illinois:“It can rain here... had my doubts. But we’ve gone from nothing to drinking out of a fire hose.”

Van Wert Co. (northwest) Ohio:“For getting 4.5 inches of rain, we sure don’t have much water standing. We were dry.”

September 12, 2020 / News page 4

Corn — USDA increased old-crop carryover by 25 million bu. from last month to 2.253 billion bushels. USDA increased estimated corn-for-ethanol use 5 mil-lion bu. from last month but cut estimated exports 30 million bushels.

USDA cut projected new-crop ending stocks by 253 million bu. from last month to 2.503 billion bushels. USDA lowered total supplies 353 million bu. due to the 378-million-bu. cut to the corn crop. On the demand side, USDA cut feed and residual use 100 million bu. and cut food, seed & industrial use 100 million bushels (with all of it coming out of corn-for-ethanol use). Those cuts were partially offset by a 100-million-bu. increase in estimated exports.

• USDA 2019-20 price: $3.60, unchanged from last month; 2020-21: $3.50, up 40¢.Global carryover excluding China: 2019-20 at 108.1 million metric tons

(MMT), up 850,000 metric tons (MT) from last month; 2020-21 at 117.8 MMT, down 5.7 MMT from August. Despite 8.8 MMT of U.S. new-crop corn sales on the books, USDA kept its 2020-21 China corn import forecast at 7 MMT.

Soybeans — USDA cut old-crop carryover by 40 million bu. from last month to 575 million bushels. USDA increased imports 1 million bu. to increase total sup-plies by that amount. USDA increased estimated crush 10 million bu., raised exports 30 million bu. and increased estimated residual by 1 million bushels.

USDA lowered projected new-crop ending stocks by 150 million bu. from last month to 460 million bushels. USDA cut total supplies 152 million bu. from last month thanks to the cut to beginning stocks and a 112-million-bu. cut to the 2020 bean crop. On the demand side, USDA trimmed total use by 3 million bu., with all of the change coming from smaller residual use.

• USDA 2019-20 price: $8.55, unchanged from August; 2020-21: $9.25, up 90¢.Global carryover excluding China: 2019-20 at 68.8 MMT, up 150,000 MT

from last month; 2020-21 at 66.3 MMT, down 1.8 MMT from August.

Wheat — USDA kept its 2020-21 wheat ending stocks forecast at 925 million bushels. It made no changes to the supply or demand sides of the balance sheet.

• USDA 2020-21 price: $4.50, unchanged from August.Global carryover excluding China: 2019-20 at 148.1 MMT, down 1.1 MMT

from last month; 2020-21 at 155.7 MMT, up 1.6 MMT from August. USDA raised its 2020-21 wheat crop forecasts from last month for Australia by 2.5 MMT, Canada by 2 MMT and the EU by 650,000 MT. USDA lowered its new-crop forecast for Argentina by 1 MMT.

Cotton — USDA’s 2020-21 cotton carryover estimate is down 400,000 bales from August to 7.2 million bales. USDA raised beginning stocks 50,000 bales, but it also cut the crop by slightly more than 1 million bales from last month. On the demand side, total use was cut 600,000 bales, with domestic use down 200,000 bales and exports down 400,000 bales.

• USDA 2020-21 price: 59¢, unchanged from last month. Global ending stocks excluding China: 2019-20 at 62.5 million bales, down

1.3 million bales from last month; 2020-21 at 67.3 million bales, down 2.0 mil-lion bales from August.

Corn CarryoverU.S. (Bil. Bu.)/Global* (MMT)

Soybean CarryoverU.S. (Mil. Bu.)/Global* (MMT)

Wheat CarryoverU.S. (Mil. Bu.)/Global* (MMT)

Cotton CarryoverU.S. (Mil. Bales)/Global* (Mil. Bales)

* Without China

* Without China

* Without China

* Without China

New-crop corn, bean stocks still ample, despite big cuts by Editor Brian Grete and Sr. Market Analyst Jeff Wilson

News alert and analysis exclusively for Members of Professional Farmers of America® 402 1/2 Main St. Cedar Falls, Iowa 50613-9985General Manager Joel Jaeger • Editor Brian Grete • Editor Emeritus Chip Flory • Sr. Market Analyst Jeff Wilson • Chief Economist Bill Nelson

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©2020 Professional Farmers of America, Inc. • E-mail address: editors@profarmer.comFarm Journal CEO, Andrew Weber

Feed MonitorFEED

Corn Game Plan: You should re-main hand-to-mouth on corn-for-feed needs. We do not want to chase the rally. Be prepared to be a buyer on harvest weakness later this fall.

Meal Game Plan: You have soybean meal coverage in the cash market through the end of September. Our downside target is $305 to $300 basis December futures.

Corn III’20 0% IV’20 0% I’21 0% II’21 0%

Meal III’20 100% IV’20 0% I’21 0% II’21 0%

Analysis page 1

DAILY DECEMBER MEAL

$308.90

DAILY DECEMBER LEAN HOGS

Position Monitor

HOGS - Fundamental AnalysisStrength in cash hogs and wholesale pork pushed futures to six-month highs. Pork cutout values rose to the highest level since May, up more than $15 since the end of July and about $8 higher than a year ago. That pushed estimated packer margins above $50, up from about $20 a year ago. The improvement increased packer demand for hogs, pushing the CME Lean Hog Index to the highest price since May and also above a year ago. Export demand has been record-strong on Chinese buying. U.S. sales may get another boost after Germany confirmed a case of African swine fever, which will lead to import bans by some nations.

Game Plan: USDA will re-lease its Quar-terly Hogs & Pigs report on Sept. 24. We want to sell rallies into month’s end to hedge fourth and first quarter marketings.

CATTLE SLAUGHTER (’000 HEAD)

HOG SLAUGHTER (MILLION HEAD)

Position MonitorGame Plan:Fed cattle h e d g e r s should be patient as downside risk is limited. But rallies will be selling opportuni-ties for marketings into 2021.

Feds Feeders III’20 0% 0% IV’20 0% 0% I’21 0% 0% II’21 0% 0%

Initial resistance is at $63.325, with stronger resistance at$65.625 (neither shown).

Initial support is at $59.80. Stronger support is the uptrend line near $58.00.

DAILY DECEMBER LIVE CATTLECATTLE - Fundamental AnalysisBeef prices fell and packer bids followed lower. However, beef demand during the Labor Day weekend was reportedly active and wholesale business improved at the lower prices. Supermarket ads continued to feature beef last week. At-home demand for beef has been stronger than expected this year, offsetting some lost restaurant sales. More reopenings should add to fourth-quarter demand and cattle strength. While beef export shipments through August rose 1% from a year ago, unshipped sales were down 17%. Improved sales on this price break would support a fourth-quarter rebound.

Initial resistance at the 40-daymoving average (green line) is backed by the July high at $110.80. Strong resistance is at the August high of $114.025.

Initial support is the uptrend line near $108.00.

$114.025

$110.80

$59.80

September 12, 2020ANALYSIS

Lean Hogs III’20 0% IV’20 0% I’21 0% II’21 0%

Weekly resistance is at $327.70and $336.00 (neither shown).

Initial support is at $308.90. Stronger support is at $296.00.

$296.00

September 12, 2020 / Analysis page 2

$5.68 1/2

$5.25 1/4

$5.54 3/4

DAILY DECEMBER SRW WHEAT

WHEAT - Fundamental AnalysisSRW - Futures struggled to follow firming world prices. Increased tenders were met with higher exporter offers as Russian farmers retain crops. Dry weather is a concern for new-crop planting in Europe and the Black Sea region, but rains have improved U.S. soil moisture for planting.

Position Monitor

Game Plan: On Sept. 9, we advised hedgers and cash-only marketers to sell 10% of 2020-crop in the cash market to get to 75% priced. We also advised all producers to sell 10% of expected 2021-crop for harvest delivery to get to 30% forward-priced.

A weekly close above the July high at $5.54 3/4 would target a run at the September high at $5.68 1/2. Strong resistance is the spring high at $5.77 1/2.

Initial support at40-day moving average (green line) near $5.32 is backed by horizontal support at $5.25 1/4.

CORN EXPORT BOOKINGS (MMT)AVERAGE CORN BASIS (DECEMBER)

CORN - Fundamental AnalysisPrices extended the rally on speculation China will increase already large purchases after three typhoons hit the country, flattening crops. Chinese domestic prices rose to their highest level in five years, despite active government sales of reserves since May. Weekly ethanol production rebounded 2.1% but was still more than 8% below year-earlier output. Stocks fell to 839 million gallons, down 11% from last year as blenders and producers do not want to be caught with excessive stocks should a second wave of Covid-19 develop. Funds have switched to holding a net long, leaving the market vulnerable heading into harvest. See USDA report highlights on News pages 1 and 4.

Two closes above resistanceat $3.73 3/4 would target$3.85 and $3.93.

Initial support is at $3.59 3/4.Stronger support is at $3.54.

DAILY MARCH CORN

$3.54

$3.59 3/4

$3.73 3/4

DAILY DECEMBER CORNPosition Monitor

Game Plan: On Sept. 9, we advised hedgers and cash-only marketers to sell another 10% of 2020-crop to get to 50% forward-priced. Keep the 20% hedges held in December corn futures in place as downside protection. Use this rally to make catch-up sales to get current with advised cash sales for the 2020-crop. With funds flipping to a net-long position and ending stocks still set to rise to a 33-year high, corn is overvalued.

A weekly close above the July high of $3.63 may spur a rally into strong resistance in the $3.70 to $3.77 range.

Initial support is at $3.48 1/2. Stronger support is at $3.43 3/4.

$3.43 3/4

$3.63

$3.48 1/2

’20 crop ’21 cropCash-only: 50% 0% Hedgers (cash sales): 50% 0% Futures/Options 20% 0%

’20 crop ’21 cropCash-only: 75% 30% Hedgers (cash sales): 75% 30% Futures/Options 20% 0%

September 12, 2020 / Analysis page 3

DAILY DECEMBER HRS WHEATDAILY DECEMBER HRW WHEAT

HRW - Crop insurance prices will be set this week and they will be sharply higher than last year. That should cap rallies, with world stocks set to rise to a record in 2020-21. USDA did not announce any new sales to China last week and overall business was modest. The loss of forward price premiums is a risk with normal Northern Hemisphere weather.

DAILY MARCH SOYBEANS

HRS - The August rally and rebound in the dollar will make U.S. wheat more expensive on the world market. Importer demand has improved, but supplies remain more than ample to cover the increase. The warm, dry August helped crops mature, limiting damage in Canada and the U.S. from frost and freezing temperatures last week.

Strong resistance is at $4.95.

Initial support is the uptrend line near $4.72.

$4.95

Strong resistance is at $5.54 1/4.

Support at $5.31 1/2 is backed by the 40-day moving average at $5.25.

$9.09 3/4

$5.54 1/4

$9.50

$5.31 1/2

Strong resistance is at $10.00(not shown). The rally has gone vertical, warning that the fund buying enthusiasmmay soon wane.

Initial support is at $9.50. Prior resistance at

$9.09 3/4 is key support.

SOYBEAN EXPORT BOOKINGS (MMT)AVERAGE SOYBEAN BASIS (NOVEMBER)

WHEAT EXPORT BOOKINGS (MMT)

AVERAGE WHEAT BASIS (DECEMBER)

SOYBEANS - Fundamental AnalysisFutures extended rallies on U.S. crop concerns and ramped-up sales to China, which have reached a record for early September. See News pages 1 and 4 for highlights from USDA’s Sept. 11 reports. Basis improved as the transition from old-crop to new-crop supplies continued. A break in basis is expected once harvest is underway, with a seasonal bottom likely by mid-October. Focus now turns to the start of the South America planting season. AgRural estimates that Brazilian producers have already sold 48% of the crop still in the bag, an unprecedented volume and reflecting record profits. La Niña weather conditions increase the importance of South American rains the next three months.

Initial support is the uptrend line near $9.58. Stronger support is at $9.12 1/2.

$9.12 1/2

Position Monitor ’20 crop ’21 crop

Cash-only: 65% 0% Hedgers (cash sales): 65% 0% Futures/Options 0% 0%

Game Plan: On Sept. 9, we advised hedgers and cash-only marketers to sell another 15% of 2020-crop to get to 65% forward-priced. Use the current market strength to get current with advised sales. Funds have aggressively built their net long position in soybean fu-tures, with much of the bullish news factored into the market. Brazilian farmers are gearing up to plant record soybean acreage.

DAILY NOVEMBER SOYBEANS

Consecutive closes above the 2020 high at $9.82 3/4 from January may target strong weekly resistance at $9.95 to $10.00 (not shown).

September 12, 2020 / Analysis page 4

’20 crop ’21 cropCash-only: 30% 0% Hedgers (cash sales): 30% 0% Futures/Options 0% 0%

Keep Pro Farmer in your pocketDownload the Pro Farmer app to your mobile device to easily keep up to date on the latest

market and policy news and analysis.

USDA Export Sales ReportWatching China’s purchase totals.

THUR 9/177:30 a.m. CT

5

Fed Policy AnnouncementFed to maintain low rates.

WED 9/161:00 p.m. CT

4

NOPA Soybean Crush ReportStrong exports boost August crush.

TUE 9/1511:00 a.m. CT

3

USDA Crop Progress ReportFocus shifts to harvest progress.

2

USDA Export InspectionsChina increases shipments.

MON 9/1411:00 a.m. CT

1

WATCH LIST

MON 9/143:00 p.m. CT

net long in early June to a net short of nearly 221,000 contracts, a major change of ownership, but that only produced a rally back up to long-term resistance near $3.70 basis December futures.

Money managers extended the net long in soybeans futures and options to almost 163,000 contracts, the most bull-ish view for early September since 2012. Funds increased longs nearly seven-fold in the past three weeks.

Meanwhile, commercials increased short soybean positions to the highest level since the July 2012 record high.

The surge in fund buying was an important factor in our advice to reward the rally and increase corn, soybean and wheat cash sales last week.

Funds moved to net-long positions in the corn, soybean, SRW wheat, HRW wheat, soybean meal and soybean oil markets simultaneously for the first time since July 2015 the first week of September. It was the biggest combined bullish bet on grains and oilseeds since 2012.

The remaining fund shorts in those six market fell to the smallest since 2017.

Funds switched to a net-long position in corn of almost 19,000 contracts on Sept. 1 with the purchase of more than 80,000 futures and options, the largest weekly purchase since June 2019 and the first net-long position in 13 months. In June, funds were net short almost 300,000 contracts, the second largest ever.

Commercials have moved from a rare

By Sr. Market Analyst Jeff WilsonFROM THE BULLPEN

Crude oil: The oil market extended its decline to a three-month low after Saudi Arabia cut its official selling price and Chinese and Indian demand slowed, with U.S. gasoline demand stagnant.

A stalled global economic recovery is leading to a fresh build-up of global oil supplies, pushing traders to book tank-ers to store millions of barrels of crude oil and refined fuels at sea again. Traditional onshore storage is at capaci-

GENERAL OUTLOOKty as supplies outpace demand.

The U.S. Energy Information Administration cut its 2020 world oil demand growth forecast by 210,000 bar-rels per day (bpd) to 8.32 million bpd. It also cut 2021 oil demand growth 490,000 bpd to 6.53 million bpd.

With the end of the driving season at hand and gasoline trading more than 20¢ below ethanol, the outlook for corn ethanol demand is weakening again.

DAILY DECEMBER COTTON

Game Plan: Make sure you are current with advised 2020-crop sales. We are targeting sales at 68.00¢ to 70.00¢ or on a close below 64.00¢ in December futures.

Position Monitor AVERAGE COTTON BASIS (OCTOBER)

COTTON - Fundamental AnalysisFutures tested support on reports the U.S. may impose restrictions on Chinese cotton products because of forced labor. Europe is also banning imports. But this could boost Chinese imports to keep its mills running. See News pages 1 and 4 for USDA crop and carryover updates.

COTTON EXPORT BOOKINGS (’000 BALES)

WEEKLY CRUDE OIL FUTURES

Initial support at the 40-day moving average (green line) is

closely backed by the horizontal line near 63.46¢. Stronger support

is the uptrend line near 62.20¢.

A close above the August high at 66.45¢ may spark a test of prior support from earlier this year in the 68.00¢ to 70.00¢ area (not marked).

63.46¢63.46¢

Futures rolled overFutures rolled overafter filling the after filling the downside gap fromdownside gap from$43.41 to $40.05$43.41 to $40.05..

66.45¢66.45¢