Market Commentary > Weekly Crop Commentary - 6/12/20

Weekly Crop Commentary - 6/12/20

Jun 12, 2020

Ed Nienaber
Vice President, Grain Division

The USDA released their update on supply and demand for the upcoming year this week, and as anticipated, in the June numbers we have little change to report. We are seeing a reduction in next year’s world carry-over stocks as they are estimating that we will see a rise in demand post Covid-19 epidemic. The assumption is that we will see increase in all sectors of our demand base from the present year and China will be the wildcard. The ethanol market is picking back up as we are beginning to see demand for nearby corn deliveries while blenders are seeing profit for the first time in months. The futures market is trading in a very sideways pattern for the week as rallies that we have seen are quickly sold. The local basis has been supported as end users are back in the market looking for just-in-time bushels to meet nearby demand. With the carry-over stocks we have in place for the balance of the summer the market will continue to pull just what it needs to meet demand waiting on new crop bushels. The next major update from the USDA will be on Tuesday, June 30. Grain stocks in all position update with usage for the third quarter of the marketing year, along with adjusted planted acres for 2020-21 crop year. Thus far the weather has not given the trade any reason to believe we will not be able to achieve trend-line yields, so any adjustments will have to come from planted acres. As always, we have a long way to go until we will know for sure what the final number will be on yield and production. The market will continue to monitor weekly crop development as we move thru the summer; updates are released every Monday evening. Hope everyone had a good week and continue to be safe as you continue with spring field work.

Wes Bahan
Director of Grain Purchasing

Good afternoon and happy Friday once again. It is hard to believe that we are approaching the middle of June, but here we are. Planting in the Marysville area is all complete. There are still a few spots that are seeing some replant activity, and that is also starting to wind down. The focus now is on fertilizing corn, spraying, and getting ready for wheat harvest. The latest and greatest from the USDA didn’t reveal anything earthshattering, which isn’t a big surprise from a June supply and demand estimation. We now turn our focus to the final planted acreage and quarterly grain stocks reports at the end of the month. This along with the weather through the July 4th holiday will be the driving force for the remainder of the month. Corn basis continues to show strength for quick shipment bushels. With farmers continuing field activity we continue to see some processors having to increase bids to encourage movement. Corn basis sure feels like it wants to work lower, but will likely stay strong until field work gets wrapped up. Bean basis continues to be steady as the export market continues to be competitive. We are currently in our summer weather market, and opportunities that are here today can be gone tomorrow.


Lou Baughman
Region 1 Grain Merchandiser

Last week the market gave producers an opportunity to get a bit of cash flow, selling old crop grain. This week the market was quieter even though there was a USDA reports Thursday. The report was bearish, no surprise, but the market held its own with wheat suffering the most. Markets are looking towards the weather models now, 6-10 day looks to favor a drier/warmer pattern. A far cry from last year at this time, but the crops are looking great right now. Do not forget to keep an eye on the markets, history tells us June and July are decent months to forward contract, not that this is a typical market year. Call your local elevator to put target orders in to help in case you are unable watch.

Lisa Warne
Region 3 Grain Merchandiser

Good afternoon. After another challenging spring, planting is essentially done and the focus this week has been side-dressing, spraying, and baling hay. The rain that came through Wednesday evening didn’t add up to as much as most had preferred, especially given the extended drier forecast. While the majority of the Western Corn Belt has had a near-perfect start to the crop, potential dryness is something traders will be watching. We shouldn’t count on it to be the market savior though, so be prepared to take advantage of any rallies that it may bring.

With this week’s WASDE report, wheat has taken the hardest hit, losing over a dime. Ohio is expected to produce 35 million bushels of SRW wheat due to increased acreage and an anticipated yield of 76, which is 20 bpa better than last year’s average. USDA’s report showed an increase in ending stocks of 16 million bushels of winter wheat. Add on top of that a global ending stocks increase of 6 million metric tonnes, the wheat market had nowhere to go but down. Corn and beans appear to be ending the week nearly unchanged. With a potentially large crop ahead of us, maybe a stagnant corn market is a win. Steady Chinese soybean purchases helped to keep beans levitated this week. All eyes are on weather and the June 30th acreage report now. Have a great weekend!

Ralph Wince
Region 5 Grain Merchandiser

Good afternoon, what a great week from a weather standpoint we have had here in NE Ohio. We had a few places on Wednesday night that had some storm damage but it was very isolated. Most received some needed rain with ranges of .3 to .75 tenths of an inch. Planting progress is wrapping up in most of the area. What a difference from last year!!! Yesterday we received our June update from USDA and there nothing that caught the traders off guard. If you did not know there was a report coming out you would not have noticed anything from the markets standpoint. The June 30th report on Quarterly Stocks and 2020 Planted Acreage will be the next potential market mover. Its hard to think that corn acres will reduce enough to help the 2021 corn carryout. With USDA coming out yesterday with a 3.323 billion bushel carryout for this years crop its hard to think that we will lose that many corn acres to make the market move. I said it last week and I will say it again, the funds are short about 275k corn contracts and if we were to get some type of weather concern that could make those shorts start to buy and cover some of that short position. But that could only amount to a .15 to .25 cent rally. If that happens you might want to get some contracted. Its just hard to be real bullish right now. Basis has leveled off and seemed to find a place that has worked to keep end users satisfied. China has continued to come to the US for some old and NC beans and that has helped support our bean basis. Most crops look pretty good as of today. By mid to late next

Steve Bricher
Region 3 Grain Merchandiser

The corn and soybean markets have seemed to find some support as the United States and the World get back to more normal activity. We have seen a rebound in driving and air travel so this has helped fuel consumption and helped crude prices rise which has helped ethanol demand. We are seeing plants increase their production, so this is helping corn demand in the eastern Corn Belt.

For the most part, the country has finished planting and there are going to be few preventative plant acres. We will get the USDA planted acre numbers at the end of the month. We most likely did not get to 94 million on corn but a loss of a few is not going to change the picture much.

We are starting to see some dry areas around the Corn Belt. We will have to see if they grow and does this get us the rally that we need to get cleaned up on old crop and get some new crop on the books. The farmer has sold very little new crop grain to this point and when does he finally pull the trigger and start pricing this crop?
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 be realistic about how far prices can advance when we are looking at the carryout’s that are predicted today.

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