Grain prices started September trading in the negative yesterday but are bouncing back this morning in a holiday-shortened trading week.
“There is a volatile mix, and that’s because we’re all intense. And there’s no denying that.” – Alex Van Halen (Dutch-American Musician)
Grain Markets See Volatile September Start
Grain markets started September trading in the negative yesterday but are bouncing back this morning in a holiday-shortened trading week.
As Garrett mentioned in yesterday’s Grain Markets Today column, wheat prices lost about 3% across all three futures exchanges (Chicago, Kansas City, and Minneapolis).
Grain markets are still trying to figure out what to do with the 21.6 MMT of 2018 Canadian spring wheat production forecasted by StatsCan on Friday. Arguably, this is bullish, considering that those numbers are down 3% year-over-year despite acres climbing 9% from 2017’s area.
Corn prices yesterday were able to buck most of the trend though as there are already thoughts that the harvest lows are behind us, given the amount of both domestic and international demand for US corn.  There are also ideas that a national average corn yield of 178.4 bushels per acre from the UDSA is likely to get smaller, not bigger.  It would be a new record if realized though.
For soybean prices, grain markets are watching what’s going in China with the African swine fever issue. It’s too early to get into too much speculation, but if the very contagious virus spreads, we could see China looking to South America and the EU for more livestock imports.  This would likely open the door to more American exports of livestock to those countries, which would, in turn, increase domestic feed demand (something the grain markets are certainly cognizant of).
Grain Markets Mostly Lower in August
Over the weekend, we published the FamLead monthly recap of grain prices for August for the 12 main crops that we cover at GrainCents. Worth mentioning is that only oats, barley, and flax saw prices improve compared to where both July 2018 and August 2017 ended.
Here’s an example of some of the charts we put into the August recap (as well as what we regularly publish for our GrainCents readers).
Chicago and Kansas City winter wheat prices have seen the most significant increase year-over-year in the futures-related crops, up 26% and 34% compared to where they ended in August 2017. Barley prices have been the best-performing player though, up 38% year-over-year.
Conversely, the worse performing markets have been in the pulses, which peas, chickpeas, and lentil prices anywhere from 38% to 66% lower compared to what prices were a year ago.
While it’s certainly a reality check, the other reality is that most pulse prices have returned to their 5-year averages.
Of interesting note is that canola prices today, compared to a year ago, are almost identical.
Crop Progress Maintains Advanced State
Yesterday’s crop progress report from the USDA continued to show that the US crop maintains its advanced state of growth. 
Soybeans good-to-excellent (G/E) rating gained one point week-over-week to 67% while 16% of fields are now dropping leaves. That’s a significant head-start from the 5-year average of 7% for dropping leaves.
For the US corn crop, 75% is now dented, a healthy distance from the 5-year average of 60%. Further, 22% of US corn fields are now considered mature, double the 5-year average. Also, corn’s G/E rating dropped one point week-over-week to 67%
As for harvest, combines are almost finished doing their job in the US for oats (94%), barley (84%), spring wheat (87%), peas (92%), and lentils (82%).