Weekly Crop Commentary - 1/26/2024
Jan 26, 2024
Vice President, Grain Division
Well, here we are again on the home stretch of yet another month. January has had its fair share of weather ups and downs, but it appears that the next 10 days are going to be warmer than average. We’ll take that I guess. Markets this week did provide a decent selling opportunity for producers. We did see both futures and basis rally, but nothing fundamentally has changed. On the corn front we are still digesting the fact that we are looking at a 2.2-billion-bushel carryout provides the question as to why. The market is going to give opportunities, and seasonally we are in one of the better periods to make marketing decisions. We did see a nice round of selling from the producers this week rewarding the rally, which is a great thing. One thing we have to establish in this type of market environment are goals and having orders working so if those goals are met, action is taken. The goals are going to have to be a bit different than what we have had the last few years, but nonetheless we still have to have goals. Please reach out to our network of grain origination people and let them help you to utilize the programs we offer to help you achieve your goals. Thank you for your business as we look forward to working with you this year.
Grain Merchandiser, Kenton (Region 1)
We had some basis improvements and a little market rally this week helping the cash beans move above $12 for a couple days. Corn and Wheat had a decent week of sales, beans on the other hand were disappointing. More grain vessels were diverted from the Suez Canal to the Cape of Good Hope as attacks continued in the Red Sea. Reuters has estimated only a third of the grain will go through the Suez Canal in January 2024 as compared to January 2023. The weather will continue to be mild for us again next week, got to love mud.
Grain Merchandiser, Upper Sandusky (Region 2)
Good afternoon and happy Friday. Last Friday of the month, time flies when you are having fun! The grain markets are not having fun however. After a couple of positive days early in the week, looks like we will end the week on the downhill, taking back just about everything we gained early in the week. A lot of questions this week on why the markets were up. Monday and Tuesday looked to be money days, which means money flowed into the commodity market by speculators propping up the markets. Wednesday, if you noticed, wheat ended up 15¢. This was due to a Russian Military plane being shot down and killing 60+ people (some are saying the majority killed were Ukrainian POWs). This dragged corn and beans along with it. Thursday hit and export sales report was bad and now we are down.
Speaking of exports. You might be wondering why it seems are exports are not where we have been in the past. That is because Brazil (especially for beans) is providing a significantly cheaper crop for sale. Currently, China can go to Brazil for a $1.50/per bushel discount compared to the U.S. That is a significant price difference. Until the U.S. becomes more competitive, exports will likely continue to be poor.
Upper Sandusky’s Regional Grain Marketing meeting will be taking place on February 12th at 6:00PM at the Elks in Upper. Dinner will be provided as well as a presentation put on by StoneX about the upcoming marketing year and beyond. I will also be giving out some details regarding wheat, bean, and corn average pricing programs that we are rolling out this year! Feel free to start RSVP by calling me or the Upper Sandusky office. Look forward to seeing everyone!
Grain Operation Manager, Urbana (Region 3)
The cold snap has ended and we now have mud season, I don’t know which one is worse. The moisture is needed after a dry fall so that is a good thing. At least the rain washed all the salt off my truck.
The corn and bean markets had a little rally early in the week and pushed beans back over 12.00 cash, that lasted for about 24 hours. I believe this is going to be the trend over the next several months as any rally will be sold by the farmer out here as you are holding a large unpriced position in your grain bins. The government reported record on-farm stocks in the January report. Most of this is unpriced at this time so any rally adds pressure to the market.
South America continues to receive rain and we know rain makes grain. The economy in China is struggling so demand there is reduced. I hate being the doom and gloom guy but I also don’t want to paint a picture of roses and sunshine.
I have written for the last month that I do not know if it is going to pay to hold Delayed Priced grain. You may not be happy with the price today but is the market going to move enough higher to cover storage and interest cost? You need to put a plan together to get your 2023 crop sold and start looking at the crop you will start planting in the next 90 days. We can help just stop in or give us a call, sometime the best thing is to have someone push you along into doing something.
Grain Merchandiser, Marysville (Region 4)
Can you believe we’re at the last Friday of January already?! Earlier in the week we had some opportunities to get Marysville bushels priced at levels that we might have to start calling “good”. Nearby corn was above $4.25 and beans above $12.05. If you have bushels on Delayed Price, you need to be thinking about risk-reward. Is the off chance of a rally (reward) worth the risk (further decline while continuing to pay)? The fragile soybean rally ended Thursday when a pitiful export sales report was released. Basis improvements are the only reason our cash bid might be higher at the end of this week versus last Friday.
With analysts starting to come out with acreage estimates for the 2024 crop, it may be time to look at new crop prices too. Perhaps target offers for new corn at $4.50 and beans at $12.00 aren’t a bad place to get started. Give us a call if you’d like us to watch these prices for you. Have a great weekend and enjoy the warmer weather!
Grain Merchandiser, Canfield (Region 5)
Good afternoon to all, the markets continue to try their best to work higher but once again we are seeing just how much grain is sitting out in the country. We saw the bean market rally around +.30¢ over the first few days of the week only to give all of that back and more as I write this column today. The corn market tried to rally as well moving up +.08¢ early in the week only to be right back where it had started as I write this. Any little run-up in the market has been met with resistance from the funds in Chicago. When the market opened today the funds were set at a net short of -268,650 contracts of corn and a net short of -81,827 contracts of beans. That sounds like a lot but understand that the record short for corn is -344,185 contracts and beans record short is -171,141 contracts. You don’t have to understand all of this but what I want you to see is that if the funds want, they still could sell off a number of contracts in both corn & beans and move this market lower.
The farmer in general continues to be a very light seller today with where the prices are at. What I would like to share with each of you today is this: Over the next few months, I have trouble seeing what drives this market a lot higher. Our next potential major USDA report does not come until 3/28/24 when USDA updates our Quarterly Stocks Report as well as a first look at the 2024 Prospective Plantings Report. We do get Carryout Updates on 2/8/24 & 3/8/24 but those probably will not give us much. I have been in this game for many years, and I know things can change, but I would offer up this as I conclude today’s comments. As we get a little rally in these markets be looking to lighten the load on some of your inventory and sell some into these markets. Look at what those deferred bids look like and maybe sell a little. Don’t wait until you have to sell and have to take where the market is that day.
Have a wonderful weekend and thanks for all your business that you give us here at Heritage. We truly appreciate you and what you do!!!!