Weekly Crop Commentary 11/18/2022

Nov 18, 2022


Ed Nienaber
Vice President, Grain Division

This week, the commodity markets continued to trade range-bound with no real commitment one way or another. Harvest is rapidly finishing, and we are seeing better-than-expected yields in the eastern corn belt, however, the west has not been as fortunate. Corn has improved a dime on the week, and beans have lost around a quarter as we approach the noon hour on Friday. We continue to fight logistic issues this fall and as we approach the Thanksgiving holiday weekend. We are starting to see some short-term relief as grain trains are beginning to show up. Concerns remain over the pending rail strike in early December and the logistic issues this will present. The river system has improved over the past few weeks, which has helped our eastern origination area. As we move towards the end of the month, we anticipate improved basis levels in the east as excellent margins on both ethanol and bean processing will keep domestic buyers looking for nearby bushels. USDA will give us revised supply/demand numbers on Friday, December 9. Looks like another cold weekend, however, we should see near-normal temperatures as we approach the Thanksgiving holiday weekend.

Wes Bahan
Director of Grain Purchasing

Good afternoon. Sounds like this weekend we get our first taste of arctic weather with temps staying below freezing for a few days. Hey, at least we're not expected to get four feet of snow like Buffalo NY, it could always be worse. We spent most of the week with everyone continuing the fight for space, but it looks like we may have some light at the end of the tunnel, and we can get this harvest wrapped up next week. The corn market really has become a bit confusing. It seems to be a story of the haves and the have nots. The western part of the corn belt experienced drought this summer, cutting yields and causing some disruptions in flows. This, coupled with a lack of rail performance in the east, has caused end users to have to start the holiday scramble, and we're seeing basis start to snap back from harvest lows. We are not seeing much movement from the farmers as bins are being locked up tight until they can get a pricing opportunity that is much higher than we are today. This is leaving spread traders in awe as the market is telling us we need an entire 14+ billion bushel crop in harvest, which we all know it can’t handle. It has created some challenges trying to navigate through, but that has been the theme for the last few years. The river markets seem to have found a top, as conditions have improved a bit, so it will be interesting to see how it goes once we get into the delivery period. Happy Thanksgiving.


Lou Baughman
Grain Merchandiser, Kenton (Region 1)

Today at Kenton, the bin crew is pumping many trucks of concrete. Soon, we won’t be able to see the two bins behind this new one. Over the past few weeks, the bin parts have come, and today we unloaded the new grain dryer. The second new scale is scheduled to arrive on December 6, and the CompuWeigh system for the scales is scheduled for the following week. The picture below was taken at noon today. The crew is halfway done with the pour. Have a good weekend!
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Haylee VanScoy
Grain Merchandiser, Upper Sandusky (Region 2)

Another roller coaster week for the grain markets, as a supposed Russian missile hit Poland on Tuesday killing two civilians and putting the grain markets on high alert. That premium was quickly taken back Wednesday after it was announced it was not intentional and was the aftermath of an interception. A relatively strong US dollar and lack of bean oil demand continued to pull bean prices lower. Wednesday was the worst day for the bean oil market since September 1st. Export sales on Thursday were better than expected, however, corn and wheat are still behind USDA’s expected pace, and beans are only slightly ahead. This wasn’t enough to help the grain markets recover, as it was also announced on Thursday that Russia and Ukraine agreed to extend the grain export corridor for another 120 days. As much of the Midwest is finishing up with harvest and the holiday season in full-swing next week, it is likely we could see these markets end up becoming range bound until we get into the first of the year. Stay warm this weekend!! A reminder that markets will be closed next Thursday. Hope you all have a wonderful Thanksgiving! 

Steve Bricher
Grain Operation Manager, Urbana (Region 3)

We are another week closer to completing harvest. We are down to the tail end, and space is tight. We are all doing our best to move grain out and make space to complete harvest. We will get there, but it may take a little while.

The corn market has rallied this week and is now back in the range we have seen most of harvest. We saw better-than-expected export sales this week, which has supported the market. With corn harvest wrapping up across the Midwest, the farmer is in no hurry to sell as he has had a good year and is not looking at additional sales at the current price levels, which I believe is also supporting the market. I think we need to see a corn price closer to $7 to get the farmer interested in selling corn in the bin.

Soybeans have held their own and continue to be well supported. We took a hit the past few days but are back above $14.25 January futures. We will have to see how planting progress and the weather in South America plays out over the next month or so. This will be the driving factor on soybean prices over the winter. I predict the local basis will stay supported no matter what as the processor is crushing as much as they can, as their crush margins are close to record highs with soy oil trading at these high prices.

Another railroad union voted down their contract. If I was in Vegas, I would lay odds that we will see a railroad strike in December. If this happens, the ag sector will come to a halt, so stay tuned.

Lisa Warne
Grain Merchandiser, Marysville (Region 4)

Good afternoon! It’s been quite a volatile week in the grain markets, with headlines out of Ukraine and Russia dominating the flow of money in and out of commodities. On Tuesday, the markets rallied when it was believed the missiles were from Russia. However, the rally ended overnight when it was realized the missiles originated from Ukraine. We did see some flash export sales announcements from USDA this week, including 73.5 million bushels of corn to Mexico, but looking at their historical purchases, this amount is not out of the ordinary for this time of year. Corn is up nearly 10 cents on the week, though, while soybeans are down around 20 cents since last Friday.

Harvest is nearly wrapped up in the Mechanicsburg area, with just a few customers finishing up. I’ve noticed several fields of corn still standing around Marysville as I explore the area and find the best route for my new daily commute. Trains are being loaded at multiple facilities as I type, so we should be making space for those of you finishing and those getting ready to core bins. I hope you all have a great Thanksgiving next week if I don’t talk to you between now and then. We are thankful for you and your families!

Good afternoon. Winter is here. What a difference a week can make. Last Thursday, we were over 70 degrees, and this Friday, we are at 30 degrees, but we can’t complain about the fall we had this year. I can’t remember a fall any better than this year. Other than a few double-crop beans hanging out there, we are pretty much done with bean harvest, and corn is headed into the home stretch here in the NE. I would put us at 80% done with corn harvest. Bean yields were about average, and corn yields appear to be slightly higher than average.

As far as the markets go, there's not a lot of fresh news out there. It appears that Russia has agreed to an extension for the shipping lane in the Black Sea Region, which will continue to keep grain flowing into the world markets from Ukraine for now. Even though it's still slower than normal it's still making a difference. We soon will be into the holiday season, and traders will be coming and going on the Chicago Board of Trade. Unless something really exciting changes, the markets should just trade within a narrow trading range. Brazil's weather has been pretty ideal up to this point, and Argentina’s weather has had a dry bias to it, but they have been getting just-in-time rains to keep the crop from stressing too much.

I still look for local corn basis levels to strengthen as we move closer to the first of the year. The Dec-Mar corn spread today is only around .03 cents carry. That tells us that the market wants the corn now rather than later. Because of that, and if the CBOT will not put carry into the market, the basis has to do the work. The Lower Mississippi saw some slight improvement this week after last week's rain event, and some of the barges that were too heavy to move were able to get going. Barge freight has softened some this week, so if we can get things rolling again, we should continue to see rates dropdown. We won’t have a column next week because of Thanksgiving, so let me wish you all a Happy Thanksgiving. The Lord has blessed all of us so very much during this past year. May God continue to bless each of you as well as your family!!!! Thanks for being a customer at Heritage Cooperative. We truly appreciate all of your business.

Ralph Wince
Grain Merchandiser, Canfield (Region 5)

Good afternoon. Winter is here. What a difference a week can make. Last Thursday, we were over 70 degrees, and this Friday, we are at 30 degrees, but we can’t complain about the fall we had this year. I can’t remember a fall any better than this year. Other than a few double-crop beans hanging out there, we are pretty much done with bean harvest, and corn is headed into the home stretch here in the NE. I would put us at 80% done with corn harvest. Bean yields were about average, and corn yields appear to be slightly higher than average.

As far as the markets go, there's not a lot of fresh news out there. It appears that Russia has agreed to an extension for the shipping lane in the Black Sea Region, which will continue to keep grain flowing into the world markets from Ukraine for now. Even though it's still slower than normal it's still making a difference. We soon will be into the holiday season, and traders will be coming and going on the Chicago Board of Trade. Unless something really exciting changes, the markets should just trade within a narrow trading range. Brazil's weather has been pretty ideal up to this point, and Argentina’s weather has had a dry bias to it, but they have been getting just-in-time rains to keep the crop from stressing too much.

I still look for local corn basis levels to strengthen as we move closer to the first of the year. The Dec-Mar corn spread today is only around .03 cents carry. That tells us that the market wants the corn now rather than later. Because of that, and if the CBOT will not put carry into the market, the basis has to do the work. The Lower Mississippi saw some slight improvement this week after last week's rain event, and some of the barges that were too heavy to move were able to get going. Barge freight has softened some this week, so if we can get things rolling again, we should continue to see rates dropdown. We won’t have a column next week because of Thanksgiving, so let me wish you all a Happy Thanksgiving. The Lord has blessed all of us so very much during this past year. May God continue to bless each of you as well as your family!!!! Thanks for being a customer at Heritage Cooperative. We truly appreciate all of your business.

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