Market Commentary > Weekly Crop Commentary - 8/28/20

Weekly Crop Commentary - 8/28/20

Aug 28, 2020

Happy Senior Citizen’s Day to all my fellow senior citizens! On Monday, the USDA, lowered the Iowa corn crop good-to-excellent rating by 10% after the “derecho storm” that caused major damage. Early indications are we may have lost 350-500 million bushels of crop production in the wake of the storm. The future prices have not taken notice as we are trading near unchanged for the week. Crop ratings in Ohio are down 1-2% for the week with the good-to-excellent category at 47% on corn and 54% on soybeans. Last week’s USDA 2021 crop estimate expects corn demand of 14.775 million bushels which is projected to be the largest amount consumed on record. With the expectation falling heavy on exports, China being the big buyer, with total exports at 2.225MB and feed usage at 5.925MB, both numbers are record usage. Not to mention we are going to process 5.200MB of corn for ethanol in the coming year, indicating that we are going to see usage at pre-Covid-19 levels. The carry-over number of 2.756MB seems to be asking a lot out of this coming year. There is no question Iowa production potential was hurt by last weeks storm, but the market is currently very comfortable with expectations of one of the largest carry-over figures on record. Much of the market’s hopes are on uncertain future demand. Local cash corn basis is hanging in there and continues to look for nearby, just-in-time bushels ahead of harvest. In contrast, bean basis currently has no friends and seems to be happy to wait on next month’s harvest. Please be safe and have a great week.


Good afternoon and Happy Friday once again.  What a wild week this was.  Crop ratings that were released on Monday night showed us more crop deterioration than originally thought.  The USDA sent confirmations daily of more export sales being booked, and two hurricanes working through the gulf.  The corn markets extended its short-covering rally as we have yet to have a day of increasing open interest since the rally began.  This has the corn market pushing the 200 days moving average for the first time since January.  The soybean market put in a nice fifty-cent move this week also pushing to levels that have not been seen since January.  The basis for cash beans is beginning to back off as we are seeing the hot dry weather begin to cause some early maturity beans to turn.  As the calendar turns to September we will continue to see cash bids converge to new crops as we get closer to harvest.  

This has been a great week for the markets, not so much for the crops.  This year, the number of ninety degree days has been comparable to 1988. We were in hopes of rain this weekend from Laura but forecasts are now looking for most of her ruminants to be in the southern part of IL, IN and OH unless something changes.  The markets have rallied on high export demand and the continued hot, dry weather this week.   Crop conditions continue to decline making yield predictions very tricky in many areas. 
There have been many contracting new crop this week because we haven’t seen this kind of price for new beans since January.    If you don’t have anything contracted this would be a good price to start at.  
Have a great weekend, be save everyone.

Happy Friday! It’s been quite an exciting week with corn and beans rallying 5% and wheat 3%. The market has added some weather risk premium as we near the end of the driest August in 84 to 128 years throughout the Corn Belt. No state showed an improvement in corn condition ratings on Monday afternoon and only ND and KY remained unchanged.

Soybean futures are at the highest levels we’ve seen since January with the continuous nearby futures testing 9.50, which we have not been above since June 2018. Corn is also testing resistance levels at 3.60 December futures. China has been continually active in purchases for the 2020/21 crop year in both corn and soybeans this week.

Quite a few soybean producers locked in contracts this week for Fall delivery. If you haven’t priced any of your new crop yet, now may be the time to get some protection on the books. I hope you all get rain this weekend and I hope it’s not too late to help fill some of those bean pods. Talk to you next week!

I wrote 2 weeks ago, well it is 2020 so who knows what is going to happen any given week. That has been the case this week as we have seen the last half August weather rally.  The dry weather across the Midwest has finally received some attention from the markets, I was able to see firsthand the dryness and the wind damage across Iowa.  Below are a couple of pictures.

The soybean markets traded this week to the highest futures prices we have seen since January.  November soybean futures are within 25 to 30 cents of life of contract highs.  I wrote several weeks ago that I thought we could see beans trade to the 9.00 cash level, it is nice for this squirrel to find his acorn once in a while.  If you have not sold any new crop soybeans this should at least get you thinking about getting started on this year’s crop.

It may not seem like it, but we have seen corn move over 30 cents higher since early August.  I know we are not seeing numbers that get you excited, but a least it does not have a 2 in front of the price.

The lack of rain in the area has taken the top off of soybean yield.  We will have to see if the chance of rain this weekend can help us.

If you are looking at wheat for next year we are getting close to 5.50 contract value for next July.  5.50 looks competitive to 3.30 corn on normal ground.

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