Market Commentary > Weekly Crop Commentary - 9-11-2020

Weekly Crop Commentary - 9-11-2020

Sep 11, 2020

The USDA released its most recent update today for the 2020-21 crop year and the biggest surprise is that the government numbers came in line with most, if not all trade expectations:
  Corn Production
(Billion Bushels)
Corn Yield
(Bushels per Acre)
Soybean Production
(Billion Bushels)
Soybean Yield
(Bushels per Acre)
StoneX 15.085 179.6 4.388 51.1
Informa 14.961 178.1 4.323 52.1
USDA Sept. 14.900 178.5 4.313 51.9
USDA August 15.278 181.8 4.425 53.3

The soybean market continues to trade higher on the continuation of continued excellent export sales, even with the anticipation of carry-over of 0.460MB. Beans are currently up 25 cents on the week and have closed higher on 15 out of the last 16 trading days. The corn market is trading in the black as well today with corn currently up 10 cents on the week. Two figures from the crop report that you will want to take note of and watch as we move forward in this marketing year are the world carry-over stocks. Corn is currently pegged at 306.79MMT and beans 93.59, both numbers are lower from last year with the increased post-pandemic demand as the reason for the large change.

Local basis continues to stay firm as the market is working hard to find old crop bushels to bridge the gap to harvest 2020. Crop ratings for the week did not change much with the good-to-excellent rating at 61% on corn and 65% on beans in the US. Locally, we did see a slight improvement in the good-to-excellent rating with corn coming in at 49% (up 4%) and beans at 55%. Please continue to be safe as we prepare for the upcoming harvest and have a great week.

Here we are in the middle of September already.  Harvest is just around the corner and we may see a bit next week.  Most in the Marysville area got a good drink on Sunday evening and will add bushels to those later maturity beans for sure.  It sure looks like we have a big bean crop coming our way.  With that being see cash beans at a premium to October. If you have HTA contracts this could be a good opportunity to lock in that basis if you will have beans ready to harvest.  If you have beans on Delayed Price locking in this basis would be a good play before new charges take effect and before the basis rolls into the October delivery.  Corn is the same way as we are looking at a premium for cash bushels compared to October. This again is a good play to lock in basis on DP bushels before new charges and the basis rolls to October. We have seen good farmer movement this week as the rally in the futures market has continued.  One thing to look at is the Fund positions.  They are estimated to be long 190,000 contracts of soybeans, and near even on corn.  This provides them ample selling power if the report today does not provide what they want to see.  

Another week closer to harvest and we are still seeing green on the screen.  USDA brought out their new and improved numbers and there were no big surprises from the anticipated estimates lowering corn and bean yields to 178.5 and 51.9.  Exports are also holding strong while the ethanol market is stagnant because people have not gone back to driving places pre-covid.  

A few bean field have started to turn, I have seen a couple losing about half their leaves.  It won’t be long now.  Many have contracted beans in the last three weeks but are still holding out for the corn to inch its way higher.

Happy Friday! Today I am in the Upper office. I was gratefully busy before the September USDA WASDE report was released at noon and we continued to stay busy after the report was released. Lower yield estimates were predicted compared to the August WASDE report. August estimates were 181.8 for corn and 53.3 for beans. September estimates were 178.5 for corn and 51.9 for beans. Between Chinese purchases and dry weather, corn and bean markets have been on the rise heading into harvest. Some have been taking advantage of the September delivery basis before basis levels start to merge with October and November. Have a safe weekend everyone!  

It looks like we’re ending this short week on a nice rally for corn and soybeans. It’s around 1:30 as I write and the USDA numbers are still being digested, but if things hold as they are, corn will have gained a dime this week and beans a quarter. Most of the USDA numbers that came in were very close to what the average trade estimates expected. While corn production was less than the August report at 14.9 billion bushels, it was still near expectation. Carryout for the 2020/21 crop year was a little higher than anticipated at 2.503 billion bushels so that kept corn from a significant rally. With soybean production at 4.313 billion bushels and a slightly lower-than-expected carryout of 460 million bushels, soybeans continued the rally streak it’s been on recently.

Here at Mechanicsburg, we’re seeing some new soybeans roll into town. Moistures are anywhere from 11.5 to 17.5%. It’s still early to get a good idea on yields. When it’s all said and done we may see an average in the 50s. Yield monitors are showing 30-70 depending on soil types and rain received. If you haven’t already, please take a moment to remember those we lost 19 years ago on 9/11 and be sure to show your loved ones extra appreciation. Look forward to seeing you roll across our scales soon!

I wrote 2 weeks ago, well it is 2020 so who knows what is going to happen any given week.   This keeps happening every week or so 2020 just keeps happening. 

Corn has recovered from the late July early August lows.  Export sales to China are supportive as well as the dry weather across Iowa.  We will start to see some harvest activity in the next couple weeks so we will get a better idea what the crop is really like across the country.

Soybeans are at the highest levels we have seen since January.  We have had more contract activity in the last 2 weeks then we have had in the last 6 months.  We have fall harvest soybeans over 9.50 as I write this, not a bad number considering what we saw a few weeks ago. 

Let keep in mind what the markets have given us over that last few weeks and do not be afraid to thank the market with some sales.

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