Market Commentary > Weekly Crop Commentary

Weekly Crop Commentary

Aug 16, 2019


Lou Baughman - Region 1 Grain Merchant

I realize I don’t get out of Hardin County much and Ohio is a little fish in the big sea of row crops so, I am very interested in what they find with the Pro Farmer Tour next week. The Pro Farmer Tour is not something to go to the bank with, it is only another tool to gather information until we can get an actual count after the combines roll.

With everything I am hearing about the crops and the prevented plant acers in Iowa, Illinois, Indi-ana, and so on, I was a little shocked at the Monday USDA’s planted acres for corn (90,000,000) and the yield increase of 3.5 bushels (169.5bpa). Bean numbers (76,700,000 acers/48.5bpa) was less bearish but not by much. This morning the markets are attempting to recover from the smack down it took early in the week but it is still a bearish market. The bulls have been put out to pas-ture until fresh news arises.


Steve Bricher - Region 3 Grain Merchant

I am writing this on Monday afternoon after the crop report. I have heard more comments then normal that there is no way the government is right. I know living here in Ohio that we look around our back yard and say there is no way this can be correct. 160-bushel yield on corn, the government has lost its mind. I have ridden over most parts of the state in the last 6 weeks and I can un-derstand that sentiment. The corn crop is still pollinating and 60 days from today puts us to mid-October. Frost would have to be a concern by then. I know it is hard to believe the government can be correct when you look out and see what we see on a daily basis.

The question I want to ask now is What if the USDA is correct. We know Ohio is going to be short on corn as even the report told us we did not get 700,000 acres planted of the 3.5 million acres from March intentions. The big 5 states were only down a total of 700,000 of the 48 million acres that they had intended The bigger question today for a farmer is what if the government is correct and we have a 2.3 billion bushel carryover this year and a 2.1 billion bushels carryover next year. Does corn need to be 4.00? If the USDA is correct, we have these numbers, and we are being told the farmer will plant 95 to 100 acres of corn next year what will prices look like in 20-21. At a 2.3 to 1 corn to bean ratio for next year the farmer is not going to increase soybean acres for sure.

At times, we need to look forward a little farther and ask the question, if the government is correct and we plant 95 million acres of corn next year does December 4.07 corn look like a place I should be selling. I know it is hard to get past where we are today but we need to be positive that we will plant next year and will need to sell that crop. When you are in the middle of the storm it is hard to see the end but we know it will end and if we can look past where we are, today we may want to start making decisions that may help us tomorrow.


Wes Bahan - Region 4 Grain Merchant 

Good afternoon. Well this week brought a tough pill to swallow. The USDA telling us there were 90 million acres of corn planted, and then the FSA confirming it with the acres certified. In an August crop report they go by stand counts and seed sets. The yield was upped to 169.5 for the national average. Most think this is a long shot, but with the research that has been done stand on counts this is in the realm of possibili-ties. Many producers are left shaking their heads at this, but what if they are right?? In the coming weeks we will be seeing others start to project yield, so we will get a vast array of different possibilities. We will get hints of yield once combines begin rolling, but we will not get confirmation on yield and abandoned acres until January. With that the likelihood of a big rally for old crop corn is very remote. The best market hope now is a frost scare since we are a month behind, but can we base any kind of a plan on that? If you have old crop bushels that are unpriced please give us a call or stop in, we would be glad to help anyway we can.


Ralph Wince - Region 5 Grain Merchandiser 

Good afternoon. Well the USDA report we were all waiting on has come and gone and boy did it throw
all of us for a loop. 90 million planted acres of corn seems hard to believe with the amount of prevent
planted acres we have but the reality is that is the number we are going to trade for a number of
months now. Bean acres were quite a bit lower but with the demand reduction in China from the African
Swine Fever we still have a good carryout number for beans as of today. If the USDA numbers are going
to change it is going to take a number of months until we see that. The earliest I feel like it could be is
Oct/Nov when harvest starts but it could be until the Jan-20 final production numbers come out. On a
positive note I do believe that our local corn basis will stay very strong going forward with Ohio being so
short on corn. As far as weather goes, its hard to believe I am saying this but we could use a drink of
water over here for the crops. Have a good weekend.


Melinda Ledley - Director Origination, Logistics and Risk Compliance 

December corn futures appear to have found something to stand on today after the sharp drop that began on Monday. There has been no “bullish” fundamental news to stop the drop. Export sales were very disappointing again this week with soybean cancellations and corn numbers dismal. The US faces strong competition for exports with growing supplies available from other major exporters. Domestic use has now leveled off and the task of gaining back export business is certainly tougher today.

Outside markets are feeling a little more secure on Friday.

Weather and yield estimates will provide market direction for the next several weeks.



Ed Nienaber - Vice President, Grain Division 

What a week this has been, the market traded drastically lower as the USDA informed us all that the American
farmer had been making plans to plant 100 million acres of corn this past spring. For now, it seems the only
thing we can really disagree on is what the average yield will be this fall, 169.5 or something in-between 160-
165. With the greatly reduced bean acres and the anticipation of the carry-over next year to a much more
manageable .755MB, than the 1.0BB this year, we should see life in the bean complex. However, continued
front page issues with the China Trade War, impending tariffs, continued problems with ASF, and the fact that
China has been cancelling purchases, they just don’t need our beans. The basis for the time being continues
to remain firm on old crop corn, while the bean basis is starting to fade from it’s highs. Starting to see slowing
down of corn being processed into ethanol as the margins continue to run in the red. Valero in Bluffton and
Linden, IN., have already announced their intent to temporarily shut down production next month. And we
are hearing continued rumors that there are more to follow suit in the east. Most ,if not all, have slowed processing and are no where near capacity at this time. The market for the time being has found its comfort zone and will be content to see how the next 60 day’s weather effects the final yields. We more than likely won’t get an acre’s harvest adjustment until the January final crop report. There has been a tremendous amount of discussion this week on how wrong the numbers from Monday are, however for now we will have to play the
cards we have been dealt.

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