Good afternoon friends!

Grain markets turned around mid day as shorts bailed out as more wheat tenders from the middle east leaked out. Morocco announced a 2nd tender for 300,000 metric tons  of US SR wheat, which caused a correction in the spread with KC. A week ago, Morocco secured 235,000 metric tons, which brings the monthly tender totals up to 20 million bushels. I’m hearing there is a growing interest in US wheat as the quality is there and is attractive in price. July 17 wheat bounced today back above 450, which still represents significant losses for anyone planting the crop next year.

Corn is in the running for one of the most boring markets on the street.  News out of France is bullish, as is the news out of the Cedar Valley in Iowa.  Nothing seems to matter at this point. I look for a turnaround in Q4, how high we go depends on how far the yields fall vs the USDA in Oct.  I do not see much bullish data coming from the stocks report.

Soybeans are looking at a turnaround off support as well as we saw Nov beans close almost 15 cents off the lows.  China announced another purchase this morning and there should be significant short covering if futures can get through 960.  I would not rule out one more run up into the upper 9’s.

The U.S. cotton harvest has just begun with 6% of cotton harvested as of the week ended Sept. 18 versus a five-year average for this time of year of 7%. I’ve talked to a few producers who have lost production in the last few weeks. There is a bullish story that exists internationally, but I have a hard time believing we will pick up any Indian business over the short term.  I would look to sell Dec 17 futures above 73 cents as an early price marker for next year.