Good Morning!
I’m hoping to get some rain this week. I know some of you probably think that’s a little crazy but we’re dry as a bone. While we finished the fieldwork we wanted to get done, I’m not too keen on heading into winter with no moisture in the ground. Temps for us have backed off a bit from the 80s we saw for most of the fall, but we’re still forecasted to be in the mid-60s for the next couple of weeks-a nice November forecast but maybe not for those wanting to put anhydrous on. We have decided we won’t be putting any NH3 on this fall due to the temps and forecast for a mild winter. I don’t want to make decisions based on one year, but this Super El Nino has thrown several curveballs already this year, and given what N costs, I want to be as cautious as can be. I appreciate all the feedback. I hope you who are fighting too much rain can dry out. For more on AgMarket, click here. https://hubs.li/Q03qt2Qd0
The corn and bean markets are tough to write about these days. With incessant selling of late, one wonders if the funds will want to keep selling once harvest is in the rearview mirror. With StoneX coming out with their November survey at 183.1 on corn and 55 for beans, pressure could stay on these markets for now. Outside markets likely had a negative impact:
Corn – After settling up a half-penny on Monday, the corn market was back to it’s old ways of late and lost ground on Tuesday. December corn closed down 5 ¾ at $4.42 ½. This was 6 off the high and 1 ¼ off the low. Corn export inspections were within expectations at 885k tons. Corn harvest came in at 74% complete, 14% of progress on the week and but still behind the 77% 5-year average. With the rain we’ve seen over the last few days, harvest progress for this week could slow a bit. On the export front, we posted huge sales on Monday with over 1.7 mmt announced to Mexico on Monday morning with another half-million tons in announcements on Tuesday morning. While these sales are solid, they’re very much needed with corn exports running well behind the USDA pace. The issue for this market is the trade sees production staying the same or even growing while demand at this point seems overstated. I’m surprised with the bearishness, but the long-term fact remains that corn demand for the US and world remains strong. With that being said, IF the market feels we have enough corn to get by, the market has shown us the last few years that rallies could be few and far between. I still like the prospect of having some corn in the bin moving forward as we likely see basis appreciation and a post-harvest bounce wouldn’t be abnormal. Dec27 corn settled down 5 at $4.84.
Soybeans – Soybeans lost 17 ½ cents on Monday, tried rallying on Tuesday, then settled a bit lower. November beans settled down 1 ¾ at $12.03. This was 7 off the high and 4 ½ off the low. December soybean meal was down 1.6 at 318, while soy oil was up .20 at 65.28. Weekly inspections showed bean shipments at 2.445 mt, the third week in a row of 2mmt+. The bean harvest advanced 9% on the week to 88%-this is now 4% ahead of the 5-year pace. The soybean market has moved methodically lower over the last 6 weeks. While we haven’t had that ‘wash-out’ day, the days with double-digit losses have added up. This US bean crop is a big one, that’s tough to argue with. I struggle to see how this bean market rallies without weather issues in South America. With that being said, the Super El Nino could throw a monkey-wrench in global soy production. IF we see a hot and dry scenario unfold, this bean market could get back everything it’s lost and then some. Volatility is likely moving forward, but keep in mind that doesn’t have to be a market moving higher. Nov27 beans settled at $11.92, down 8 ½.
Matt Bennett
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