Good Morning!
I’ve heard from several of you who are getting after it this week. With good weather throughout the corn-belt, it should be a productive week. Many of you are reaching out expressing frustration at the October WASDE report and of course the resulting price action. While a down-turn in October isn’t out of the question, there’s a ton of frustration in farm country currently. For those who haven’t reached out, be sure and let us know how your production looks versus a year ago. I want to hear from as many of you as possible-the good, bad and ugly. Around here, we’re going to try and knock out as much of the fieldwork as possible with this good weather. It really is wild how dry it’s been around here this fall-no excuse to not get everything done a person wants. Keep me posted. For more on AgMarket, click here. https://hubs.li/Q03qt2Qd0
The corn and bean markets are mired in one heck of a slump as we continue to see sellers have control. Funds have likely continued to trim their long positions. Outside markets likely had a negative impact:
Corn – After settling down 7 ¼ on Monday, the corn market tried to work higher on the overnight before succumbing to selling pressure in the day session. December corn closed down 5 at $4.62. This was 6 ½ off the high and 1 off the low. Corn export inspections were below expectations at 672k tons. Corn harvest came in at 44% complete, just 11% of progress on the week and well behind the 52% 5-year average. Harvest has been running behind, but the current weather and forecast isn’t threatening at all. This is likely aiding in the meltdown in the markets. With funds continuing to liquidate their long positions, there’s not many buyers to offset that position. While I’m in the camp USDA has overshot the yield, we’re hearing great yields out of northern Iowa and parts of Minnesota-while that may not be enough to off-set the lower yields, we have a decent-sized crop most likely. It’s not uncommon to see weakness in the thick of harvest, but I doubt this is as much hedge pressure as it is fund liquidation. Therefore, I’m still in the camp corn will be good property moving forward. It may take some time, but with basis likely to improve on the heels of harvest, the cash market will have the job of prying the bushels out of the farmers’ hands. If you have sold corn and want to re-own, it seems like a fine time to consider it after such a meltdown. On the flip-side, if you want to protect what is in the bin, a flexible floor makes sense on those bushels as well. Let us know if we can help you manage some of this risk we’re seeing. Dec27 corn settled down 1 ¼ at $5.03.
Soybeans – Soybeans lost 7 ¾ cents on Monday, tried rallying as well, then faltered as the day wore on. November beans settled down 5 ¼ at $12.48 ¼. This was 11 ¼ off the high and 2 ¾ off the low. December soybean meal was down 6.1 at 348.7, while soy oil was up .04 at 66.73. Weekly inspections showed bean shipments at 2.002 mt, well above last week and expectations. The bean harvest advanced 18% on the week to 64%-this is slightly behind the 5-year pace of 65%. While beans have essentially caught up with the average pace, the yields have been what has hampered the market as much as anything from my estimation. Given many growers are reporting record yields, it’s tough to find any buying-especially with cash prices still well above what growers have had a shot at the last few years. Big Chinese buying last week and into this week hasn’t been enough to counter the selling with funds presumably liquidating more longs each day. At this point, if USDA raises yield as many of us assume they will, we’ll be down to a South American weather issue to prop this market up. I’m not necessarily bearish beans, but I think it’s wise to lock in some worst-case scenarios. Nov27 beans settled at $12.38 ¼, down 1 ¼.
Matt Bennett
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