Good Morning!
Harvest is in full-swing in those areas that aren’t battling too much rain. Unfortunately, several of you are in that boat, so to speak. While we’d dodged the rains to start harvest, we finally had a rain on Sunday into Monday of an inch or so. Given we were bone-dry, we were able to run on Tuesday in some corn. Our corn is down to 15-17% with the beans hopefully testing(with no leaves) once we get them biting hard again. Yields for us have been solid but well off of any records. We had way too much saturation in the month of June, so the low areas are really killing yields. I’ve heard some east of us talking sub-200 bu corn on 250-bu ground, while talks of record yields have been absent so far. I know once a person starts, it seems the goal is to finish so be careful out there. Keep me posted on yields. For more on AgMarket, click here. https://hubs.li/Q03qt2Qd0
The markets started the week with a bang on Monday and gave a small portion back on Tuesday. Many are watching weather in Iowa, Minnesota and northern Illinois/Indiana where big rain totals are keeping many growers from running. Presidents Trump and Xi are to meet this Thursday, with rhetoric so far of a positive tone. Outside markets likely had a negative impact:
Corn – After settling up 15 ½ on Monday, the corn market gave some back on Tuesday. December corn closed down 6 ¼ at $5.36 ¾. This was 7 ¾ off the high and 1 ¼ off the low. Corn export inspections were well above expectations at 1.939 mmt. These shipments were 400k over a week ago. Corn harvest came in at 13% complete vs the 5-year-average at 11%. With harvest concerns likely boosting the corn market on Monday, some profit-taking was likely on Tuesday while hedge pressure from farmer selling is picking up. Harvest is rapid in parts of the eastern-corn-belt, while the opposite is the case in the west. The market is likely paying attention as saturated soils are preventing harvest while forecasts aren’t letting up on the rain in those areas. If we stay wet much longer, both quality and quantity will come into question for those not able to harvest in a timely fashion. The Trump and Xi meeting will be watched closely to see if any mention of corn exports to China are discussed. If they are in fact going to buy 17-billion worth of non-soybean ag products, I’d assume some corn would be in the mix. Dec27 corn settled down 5 ¼ at $5.31 ¾.
Soybeans – Soybeans also rallied on Monday before giving back some of the gains Tuesday. November beans settled down 2 ½ at $13.25 ½. This was 6 off the high and 7 off the low. October soybean meal was up 2.3 at 368.9, while soy oil was down .95 at 67.37. Weekly inspections showed bean shipments at 759k mt, an increase from a week ago levels and at the high end of expectations. The bean crop is 12% harvested, which is ahead of the 5-year-average at 8%. While there is certainly concern with the corn harvest, beans in the field that are ready to go but can’t be harvested due to muddy soils-is a big issue. In Iowa this week, basis has caught fire in some areas with posted bids as much as 70 over. Given these crush plants need beans to keep going and local harvest isn’t able to be accomplished, they have to raise the bid high enough to get beans there. Some talk of beans getting loaded on barges and heading north up the river has been discussed, which is about unheard of. World weather continues to be monitored closely with the strong El Nino, while global demand is robust to say the least. It’s not hard to fathom additional premium being added to this bean market, but selling into it makes great sense at the same time. While China has bought over 50% of the 25 mmt based on confirmed sales and unknown which are believed to be of Chinese origin, the meeting this week will be watched closely for further developments. In all honesty, we may not have many more beans to export than what they’ve already committed to, but reaffirming the 25mmt per year deal would be music to the market’s ears. Nov27 beans settled at $12.82 ¼, unchanged.
Matt Bennett
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