Good Morning!
I know we’ve got people who are reading this who are finished and some who are a long way from it. I appreciate all of the feedback the last few days. While most of you are relaying disappointment on corn yields and being pleased with bean yields, I know there are some who have great corn who haven’t given feedback. I’m not the USDA, so don’t be afraid to respond. 😊 Around here, we’re dry as a bone. We’re finishing up fieldwork this week most likely-and I can assure you, we’re not finding any moisture whatsoever. I’ve been doing some in-line ripping on end-rows where we loaded trucks and had plenty of traffic and it’s hard to believe but it’s dry down to 15 inches. We’re supposed to have a shot at some rain this weekend, and I hope we get it. I know some of you hope you don’t, so good luck with regards to the weather. Keep me posted. For more on AgMarket, click here. https://hubs.li/Q03qt2Qd0
The corn and bean markets are getting smoked on the daily. With Brazil’s election going opposite of what was expected and now President Lula in power, the markets have shown a lack of confidence in Brazil’s future direction. The real has plummeted, which makes Brazil’s products much more competitive on the world export market. Outside markets likely had a negative impact:
Corn – After settling down a penny on Monday, the corn market posted bigger losses on Tuesday. December corn closed down 6 ¼ at $4.48 ¾. This was 6 ¼ off the high and ¼ off the low. Corn export inspections were below expectations at 625k tons. Corn harvest came in at 60% complete, a solid 16% of progress on the week and but still well behind the 66% 5-year average. Harvest continues to run behind the normal pace due to the slow start out west, and with weather coming in this weekend for many in the corn-belt, this week needs to be a productive one. The tough thing about this time of year is the days are getting shorter and it takes much longer to dry out when we get a rain. This corn market needs some help from whatever direction we can get it. The funds have been pounding this corn market as growers are likely shutting the bin doors and/or putting corn on storage, awaiting better prices. While I feel like the USDA is too high on national corn yield, fighting city hall isn’t always a great idea. With that being said, the corn I put on DP towards the end of harvest isn’t getting sold anytime soon. I’d like to see how this market plays out over the next few weeks. If a person feels they haven’t sold enough corn, it gets a bit tricky as most of us need some money in the fall. If that’s the boat you’re rowing in and need to sell some corn, I’d consider a way to keep ownership as demand is likely to grow with prices moving like they have. Let us know if we can help you manage some of this risk we’re seeing. Dec27 corn settled down 4 at $4.90.
Soybeans – Soybeans lost 15 ¼ cents on Monday, tried rallying on the overnight market, then continued their descent as the session wore on. November beans settled down 12 at $12.29 ¼. This was 22 off the high and 1 off the low. December soybean meal was down 5.6 at 334.6, while soy oil was down .30 at 66.71. Weekly inspections showed bean shipments at 2.476 mt, the second week in a row of 2mmt+. The bean harvest advanced 15% on the week to 79%-this is now 2% ahead of the 5-year pace. The soybean harvest will be banging on the door of completion before long. Anywhere that’s the case, basis is likely to improve as originators try to get their hands on remaining bushels. This could be a good opportunity for those with HTAs, so keep an eye out for improving basis. As with corn, beans have gotten beat up here this week. Most, if not all of this is due to Brazil’s election. With most feeling Brazil’s economic situation isn’t near as strong with Luna at the helm as if Bolsonaro would have been elected, it will be interesting to see how the Real behaves moving forward. If it continues to stay weak, US bean will struggle to be competitive on the world market. Fortunately, we’re crushing beans like it’s going out of style and China has fulfilled a big chunk of their commitment. I don’t expect US stocks to get too burdensome, even with what I think is a US crop that is bound to get a bit bigger. Nov27 beans settled at $12.12 ½, down 8 ¾.
Matt Bennett
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