Market Commentary > Weekly Crop Commentary

Weekly Crop Commentary

Jun 26, 2020

Ed Nienaber
Vice President, Grain Division

The USDA will be releasing the adjusted planted acres report on June 30, as well as quarterly stocks report. The futures markets are feeling the pressure this week as most are expecting corn planted acres to be over 95.0 million acres and beans right at 85.0 million. Weekly crop ratings continue to show excellent crop development and with very little weather issues, most if not all private forecasters are currently predicting above trendline yields. In addition, the stocks in all position report is expected to show more than ample inventories and thus futures markets are finding little support going into the weekend. Corn basis continues to stay firm in the east as end users continue to cover demand with just in time deliveries. However, the market is aware of those bushels in inventory and we are running out of time to take advantage of old crop premiums in the corn market. Soybeans have come under pressure as we pointed out last week; processors crush margins are shrinking, and the bean market has become inverted. Thus, the country is cleaning up bean inventories as new crop development takes place and local demand slows down. We will quickly turn our attention to weather development as we move into the pollination stage of the corn crop. The next USDA supply and demand report will be released July 10 and with currently anticipated planted acres, we will be looking at an excess of 3.0 billion corn carry-over and 0.400 carry-over in bean stocks for 2021. The demand picture continues to be the wild card as we try to maneuver through the Covid-19 pandemic, will China continue to import US farm goods per Phase One agreement, and will we meet domestic demand goals for 2020-21 crop year. Please be safe and continue to check on your neighbors and have a great week.

Wes Bahan
Director of Grain Purchasing

Good Afternoon. Hard to believe that we are in the final weekend of June, but here we are. The USDA will be out Tuesday with the final planted acreage for the 2020 growing season. Trade guesses are right around 95 million acres of corn and 85 million acres of soybeans. We will also get updated grain stocks as of June 1st to determine usage for the quarter. This will also give us indications as to where the remaining inventories are located. We are quickly approaching a pivotal time of the year for the grain markets as corn nears the pollination stage of its life. Corn basis continues to be strong for cash delivery, but this can fade quickly as fieldwork wraps up and grain begins to move again off the farm. Bean basis has had a weaker tone lately as crush margins work lower, and exporters appear to have ample coverage. The crops in my part of the country look good for the most part. We do have some spots that are less than ideal, but nothing widespread. If we look at fund positions corn shorts are the highest since May of last year, before the planting issue we
experienced. Their positions for both soybeans and wheat appear to be somewhat neutral. This is about the
only bullish sentiment for corn, but will something develop to inspire them to cover these positions? I know
most are have a doom and gloom mentality for the corn market, and right now it is nearly impossible to drum
up an argument against it. Have a great weekend and stay safe.


Lou Baughman
Region 1 Grain Merchandiser

Not a good week for the markets. Favorable weather and China buying from Brazil is making the market
struggle to fight the downward movement. July futures first notice day is Tuesday if there are any unpriced
basis contracts something will have to be done with them. The June acreage report is also on Tuesday, bean
acreage is expected to increase, and corn is expected to decrease. This may affect the market, but only for a
short time, then we will be watching the weather again.

Locally, we need rain. Grain movement has picked up some now that most of the field work has wrapped up.
With the warm temperatures keep watch of the quality of your stored grain it will be harder to maintain.

Lisa Warne
Region 3 Grain Merchandiser

Good afternoon. While most of this area could use some rain, the majority of the Corn Belt has seen nearly
ideal growing conditions and getting rain when needed. This has only added to the bearish sentiment to an
already anticipated large crop. Corn, beans and wheat are all seeing double-digit losses for the week. Locally,
last week cash corn basis strengthened a nickel and this week wheat basis improved a dime, while soybeans
weakened by five cents.

We’ve got the USDA Stocks & Acreage report coming up on Tuesday. The average trade guesses from analyst
have corn acres decreasing from the March report by 1.8 million to 95.2 million acres. Average estimate on
soybeans may see an increase of 1.2 million to 84.7 million acres. If USDA publishes anything significantly
different than those guesses, we could see some movement in the market.

By this time next week, I anticipate we’ll have seen our first few loads of freshly harvested wheat. There are a
couple customers with earlier varieties itching to get started, but it sounds like most customers probably
won’t be running until after the July 4th holiday. Have a great weekend!

Ralph Wince
Region 5 Grain Merchandiser

Good afternoon, we received some needed rain this week here in NE Ohio. Since the rains, crops have perked
up. A lot of the corn is getting into the nitrogen and greening up very nicely. Our soybeans look good as well.
The crop is off to a good start and our 6-10- & 8-14-day forecast look pretty good. Our wheat crop is turning
pretty fast and it looks like we should have wheat shortly after the 4th of July. It’s hard to think that we are
talking about the 4th already. Where has the time gone!!!! The bean & corn markets took a pretty hard hit on
Thursday during the trading session, but beans came back to only close down .0150 cents and corn closed
down .07 cents. The avg trade estimates are out for the all-important Quarterly Stocks & USDA Acreage
Reports next Tuesday and corn acres came out at 95.207 down from the 97.0 million from the March
Prospective Plantings number and soybeans are up to 84.716 million acres from 83.510. It’s hard to find
something bullish to talk about in the markets right now but the one thing that I would tell you is this. The
funds (the speculators) are holding a very large short position as of today in corn, around 290,000 contracts.
The record short is about 345,000 contracts, so if the corn acres would be under the average trade guess, we
could see the funds cover some of those short positions and the market could rally a little. I am not bullish
corn but maybe we could see a .15 to .20 cent rally and I for sure would want to be a seller of some corn. I hope
all of you are doing well, and I will close with this. I know that it’s easy to focus on the negative and get caught
up in all of that, but please focus on the positives in each of your lives. There is always someone that has it
worse than we do. Think positive and give thanks that we live in the greatest country in the world. I’m not sure
if we are going to have this next week or not so just in case, we don’t I would like to wish you all a Happy 4th Of

Steve Bricher
Region 3 Grain Merchandiser

This has not been a good week for the corn market. We have set back from recent highs. It is hard to get
bullish the corn market when weather across the country is ok and usage is not back to what it was before
Covid-19 hit us this spring. Historically we see new crop contract highs somewhere around mid-June, I hope that is not the case this year because that would put new crop contract highs around 3.00. We have not seen this number for a contract high since 2006.

We will have to see if we can get some reason to make this market move higher. We also get the June crop
report next Tuesday maybe will we have a surprise there. Soybeans have held their own even though we have pulled back from recent highs. Similar to corn, we see new crop highs sometime in June, let’s hope we find some reason to make this market work higher. I know as a farmer today it is hard to be optimistic about the world we are living and working in, but as I know the farmer is the eternal optimist, if he wasn’t how do you put seeds in the ground and hope and pray that Mother Nature will take care of the rest Broken record time for those of us old enough to understand what that means, as I have said for the last few week’s rallies need to be sold. Unless we have a major weather problem going forward, we have to realistic about how far prices can advance when we are looking at the carryout’s that are predicted today.

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