09/18/2023 Why “Harvest Pressure” May Be Countered by Willing Buyers

FALL FERTILIZER RECCO DAY 3: The months of down-trending fertilizer prices appear to have bottomed out. Per last Thursday’s Weekly Retail Fertilizer Update price fall fertilizer needs now if you haven’t already. On the Grains: Corn and soybeans are steady in overnight trade despite early harvest picking up pace through the weekend. Wheat is weaker. Part of the weakness we saw in corn and beans Friday was likely what’s termed “pre-hedging pressure” as cash merchandisers take short positions against what they anticipate purchasing from farmers through the weekend and can’t risk doing so unhedged. Steady overnight prices thus far shows they adequately anticipated what they bought. The light overnight pressure also shows bears weren’t much emboldened by Friday’s COT report showing funds added heavily to their net short position in corn. They sold nearly 41,000 more contracts through last Tuesday, taking their net short total to just shy of 135,000. Similarly, funds lightened up their net long position in soybeans by nearly 9,000 contracts yet remained net long just under 74,000. Expectation of traditional “harvest pressure” can be read into the fund action on both counts. We continue to suspect this harvest pressure may prove lighter than anticipated for two reasons….