Good Morning!
We had some rain over the weekend, but with the heat we have in the forecast, we have some farms that will need more in the next couple of weeks. With all of the early rain we had, I’m not sure we have the roots we need for a hot and dry spell. It seems the forecasts are changing daily at least once, so it’s hard to keep up with. My kids are getting ready for 4H fair, which is this next week. Given we aren’t showing at state fair this year, this is the main show for them. Typically, we get a good soaking rain the week of 4H fair to make it nice and muddy, so I suppose I’m hoping for that yet again. As always, I appreciate the feedback. Keep it coming. For more on AgMarket, click here. https://hubs.li/Q03qt2Qd0
The markets started on Sunday night with some buying again but sold off into the close on Monday. Tuesday saw corn give back the gains and a bit more while beans lost ground as well. Forecasts shifted to more rain and more moderate temps, which took the shine off the market. Geo-political issues with Ukraine/Russia as well as the Strait of Hormuz have likely provided somewhat of a lift to commodities overall. Outside markets likely had a muted impact:
Corn – The corn market started the week with big gains on Sunday night, but by Tuesday’s close, we were lower on the week. September corn closed down 2 ½ at $4.38 ½. This was 1 ¾ off the high and 3 ¾ off the low. Corn export inspections were above expectations at 1.540 mmt. This shipments number was 100k lower than a week ago but continues to show strong shipping activity. The crop ratings improved to 68% good/excellent, which still lags the rating of 74% a year ago. Again, this is all about weather at this point. IF we saw a sustained hot and dry period through a good chunk of the corn-belt, there’s no doubt the funds would be buying-if history is any indication. However, even with a tight stocks number for new-crop, the trade seems content with the shape this crop is in for the time being. The market for fall corn failed at establishing Dec over $4.70, so it may be tough to see a rally before harvest without major weather issues and/or Chinese business. I’d consider wrapping up these old-crop sales soon and keep some flex on new-crop. Dec corn settled down 2 ¾ at $4.60 ½.
Soybeans – Soybeans also rallied on Sunday but gave back some of those gains on Tuesday. August beans settled 4 lower at $11.92 ¾. This was 5 ¼ off the high and 5 off the low. August soybean meal was up .2 at 317.4, while soy oil was down .42 at 72.40. Weekly inspections showed bean shipments at 419k mt, which was below expectations and a week ago by 100k. The bean crop was rated 65% good/excellent, so it improved 1%. The bean crop a year ago was rated 70% g/e, so this year’s crop is certainly not viewed as impressive as a year ago at this point in the growing season. This bean market has tried to get up and over $12, but it hasn’t had much luck. At the same time, prices have been resilient for beans as demand continues to impress both domestically and in the world. While we need to clean these old beans up before long, with new beans it all boils down to profitability. If you can lock some in, I’d be careful to snub my nose at current prices. I’d also keep some flex in the event we take off higher in the next few months. Given massive world production, it’s impressive world stocks aren’t necessarily growing. Nov beans settled at $11.91, down 3 ¾.
Matt Bennett
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