Market Commentary > Weekly Crop Commentary - 6/19/20

Weekly Crop Commentary - 6/19/20

Jun 19, 2020

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Ed Nienaber
Vice President, Grain Division

The Chicago futures market appears to have taken the week off as we are closing the week out on both sides of unchanged in corn and beans. Wheat has traded lower on the week as new crop SRW is finding its way to the elevator in states south of Ohio. The basis continues to do the heavy lifting in the corn market. As we attempt to open the country back up, ethanol and feed demand for just in time bushels is beginning to increase. The bean basis has turned very flat as carry in the futures market has evaporated, along with crush margins. Crop ratings for the week were supportive early as the USDA dropped the good to excellent by 4% on corn. Warmer temps, with little rain in the forecast brought buying into the market, but it was short-lived. Exports for the week were decent, as China continue to work on executing the Phase One trade agreement with the US. The markets continue to trade in an unstable manner, with little technical buying support. Traders are unsure of the long-term effects will be of the Pandemic, and how that will affect demand as we move into the fall. The next USDA crop report will be released at the end of the month and we are expecting a reduction of about 3 million acres corn from March projections. With that being said, the current demand projected for 2020-21 crop year, with trendline yields will put our carry-over corn stocks just under 3 billion bushels (stocks to use ratio over 20%). Soybeans carry-over is anticipated to be around 400 million bushels (down about 200M from this year-almost all in EXPORTS), and a stock to use ratio of about 9%. Usage figures through the third quarter of the marketing year, stocks in all positions, as well as adjusted planted acres will be released at noon on Tuesday, June 30. Please continue to be safe, have a great week and Happy Father’s Day to all the dads!

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Wes Bahan
Director of Grain Purchasing

Good afternoon and Happy Friday once again. First of all I want to wish all the dad’s out there a Happy Father’s Day. This week we continued to see a lot of fieldwork getting completed. Replanting some thin spots looks to have finished up, and corn fertilizing in nearly complete. Crops in this area look really good, and most of the area did receive some rainfall last night which will help with the heat that is expected this weekend. The extended forecast maps are trending towards some cooler temps and above average rain chances, but heat and dryness will persist in the western areas of the Corn Belt and the Great Plains. News from the week was mixed. The most notable came last night as apparently the Chinese did vow once again to uphold the requirements of the phase 1 trade agreement. This seemed to bring some renewed buying interest in the face of the slow exports, slowing soybean crush, and good crop conditions. Corn basis levels continue to improve
slightly as the end users need to cover spot needs, but this could change quickly as fieldwork finishes up. Bean basis continues to be steady for the week. Like I mentioned earlier, the NOPA crush numbers from last month were below expectations, but the Brazil export program is getting cleaned up making US exports more competitive. As we have said before the month of June typically provides one of the better opportunities of the year to put sales on the books. All eyes will continue to be on the weather, June 1 grain stocks, and the final acreage report.

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Lou Baughman
Region 1 Grain Merchandiser

Another week has gone by without much rain in the area and the crops are starting to show it. Most have everything finished and are now waiting for “God’s Water”, as my Aunt would say, to make things grow.
Corn is slowly creeping back from the lows in April. Beans have also come a long way, rallying fifty cents since April 1st, if there is beneficial rain through any of the Corn Belt over the weekend and next week this could cap the rallies until there is a weather scare of sorts or demand ramps up. Happy Father’s Day to all you hard working Dads.

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Lisa Warne
Region 3 Grain Merchandiser

 

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Ralph Wince
Region 5 Grain Merchandiser


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Steve Bricher
Region 3 Grain Merchandiser

We have seen prices this week move slightly higher. Soybeans seem to be pulling the corn market along. Export sales and good domestic usage seem to be supporting the soybean market.
I can get friendly with the soybean market; with global consumption we could see a demand for soybeans all winter from the United States, and the farmer these days seems to be a reluctant seller. Now I am not saying we will see soybeans in the teens, but I think we may have the chance to at least sell soybeans with a 9 as the first number.

Corn prices continue their rise from multi year lows. We have rallied almost 30 cents from the lows in late April and early May. The funds are as short as they have been in forever, but the farmer is still holding on for a rally. These may unwind the market together if we have a reason to rally prices but most likely one will get out before the other.

Broken record time for those old of us 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 be realistic about how far prices can advance when we are looking at the carryout’s that are predicted today.



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