Weekly Crop Commentary - 11/4/2022
Nov 04, 2022
Ed Nienaber
Vice President Grain Division
This week, the commodity markets have traded largely on rumors from the western Europe grain corridor and China COVID policies. The on-again, off-again rhetoric has caused major swings this week in soybean and wheat futures. Soybeans are currently up sixty cents on the week. Corn continues to trade sideways with very little concern in Chicago as it has become a domestic price product. Western basis levels at close to a dollar over futures prices due to poor corn yields have end-users working to get inventories filled before winter arrives. Eastern corn basis is feeling the pressure of better-than-expected yields, bins filling up, and logistic issues. We are seeing bean basis improvement as we harvest the final 10% of Ohio’s crop. Excellent crush margins and anticipated export has soybean processors looking for bushels. However, today, the corn market in the east finds itself working to find a home for the final 30+% still in the field. The USDA will be releasing the latest supply/demand figures on Wednesday. Anticipated carry-over on corn is 1.2 billion bushels and beans are right at 0.200. Overall, we are not expecting much of an adjustment to those numbers next week. However, we could be setting ourselves up for some excitement in early January when final production numbers for fall harvest 2022 are released. Have a great harvest week and please continue to be safe.
Wes Bahan
Director of Grain Purchasing
Good afternoon. Welcome to November, and what beautiful weather to end the week. The markets started the week off strong, with news that Russia was going to halt grain shipments but decided to allow them once again. This sent the markets right back to where they ended last week. We seem to be ending the week on a positive note with some bargain hunting and more drought concerns in Argentina. Speaking of drought concerns, we haven’t seen any improvement on the Mississippi River. We continue to see lower draft sizes and reduced tows to keep the freight market extra tight during the busy season. Again this week, the Fed raised interest rates by another 75 basis points as they continue the fight against inflation.
Corn yields seem to be a bit all over the place this year. Over in the Delaware area, some are reporting this is the best corn they have ever raised, while others to the south were extremely disappointed in the harvest. This year, we seem to be fighting that nasty V word again in the corn. Vomitoxin seems to be all over the place, much like the yield. It seems to be really bad in some areas, while other areas don’t seem to have nearly the issues. This will wreak havoc on some marketing plans simply because some markets just cannot take it. This is an ongoing development that continues to evolve more each day.
Next week the USDA will release its monthly supply and demand updates. It’s always interesting to see what tweaks they make to the numbers. As always, have a great weekend, and thank you for your business.
Haylee VanScoy
Grain Merchandiser, Upper Sandusky (Region 2)
A volatile week of ups and downs to start off the month of November. Over this past weekend, Russia withdrew from the Ukrainian grain export corridor agreement shocking the markets Sunday night into Monday, only for Turkey’s president to reverse course on Wednesday and state that Ukraine will continue to export grain, at least until the November 19th deadline. Also on Wednesday, the Fed had another rate hike of 75 basis points, which was to be expected and further strengthened the US dollar this week. As a result, the US continues to be priced out of the global marketplace with another underwhelming week of export sales. Headlines focused on China on Thursday, where we saw that they approved Brazilian corn imports and rumors swirled around the possibility of China easing their strict covid policies. Hold onto your hats for next week with the election on Tuesday and the November WASDE on Wednesday. Hope you all have a great weekend!
Lisa Warne
Grain Merchandiser, Marysville (Region 4)
Good afternoon! Even with some heavy fog this week, we’ve made big strides in corn harvest. Comparing Mechanicsburg’s corn number today versus our five-year average, we’re about 5% ahead and 15% ahead of last year’s corn harvest progress! While we may have gotten off to a slow start at the beginning, we’ve managed to have a successfully speedy harvest together so far.
The pendulum swing in the market earlier this week was headline driven by Russia’s departure and then surprising return to the export agreement in the Black Sea region. Corn is aiming to finish the week mostly unchanged, while soybeans are supported by the soy complex. Soy oil is sitting at a 5-month high with the help of diesel demand pushing renewable diesel and vegetable oils higher. To take advantage of volatile swings in the market, be sure to place target offers with us in case the rally is short-term.
I’ve started to spend more time at the Marysville Ag Campus (MAC) this week, and it’s been nice to catch up with familiar faces and meet some of you for the first time. I’ll be splitting my time between Mechanicsburg and MAC for a couple more weeks, but plan to be permanently at MAC around Thanksgiving. Have a great weekend and we’ll chat next week!
Ralph Wince
Grain Merchandiser, Canfield (Region 5)
Good Afternoon. Next Wednesday is another USDA crop update, and ATG has corn and bean carryouts rising slightly. Nothing about that changes the overall picture. Beans are all but done here in NE Ohio, and corn is moving right along. This fall harvest season has been one of the best ever from a weather standpoint. Farmers have taken full advantage of this wonderful weather. A lot of fall tillage is also getting done, which should help with spring planting next year. As far as prices go, we continue to stay in a pretty narrow trading range. From this week’s news, Russia said they would be pulling out of the agreed safe passage in the Black Sea, and then a couple of days later, they retracted those comments - we see how that can affect the markets. On Monday, wheat was up +.53 cents, and by Wednesday, back down -.56 cents. That shows how volatile these markets can be on any given day. As we move away from harvest, please continue to watch those markets, and have some targets working for what you have in the bin and also for next year's crop. Have a great weekend and enjoy the weather. There are not many of these kinds of weekends left before the winter season sets in.
Vice President Grain Division
This week, the commodity markets have traded largely on rumors from the western Europe grain corridor and China COVID policies. The on-again, off-again rhetoric has caused major swings this week in soybean and wheat futures. Soybeans are currently up sixty cents on the week. Corn continues to trade sideways with very little concern in Chicago as it has become a domestic price product. Western basis levels at close to a dollar over futures prices due to poor corn yields have end-users working to get inventories filled before winter arrives. Eastern corn basis is feeling the pressure of better-than-expected yields, bins filling up, and logistic issues. We are seeing bean basis improvement as we harvest the final 10% of Ohio’s crop. Excellent crush margins and anticipated export has soybean processors looking for bushels. However, today, the corn market in the east finds itself working to find a home for the final 30+% still in the field. The USDA will be releasing the latest supply/demand figures on Wednesday. Anticipated carry-over on corn is 1.2 billion bushels and beans are right at 0.200. Overall, we are not expecting much of an adjustment to those numbers next week. However, we could be setting ourselves up for some excitement in early January when final production numbers for fall harvest 2022 are released. Have a great harvest week and please continue to be safe.
Wes Bahan
Director of Grain Purchasing
Good afternoon. Welcome to November, and what beautiful weather to end the week. The markets started the week off strong, with news that Russia was going to halt grain shipments but decided to allow them once again. This sent the markets right back to where they ended last week. We seem to be ending the week on a positive note with some bargain hunting and more drought concerns in Argentina. Speaking of drought concerns, we haven’t seen any improvement on the Mississippi River. We continue to see lower draft sizes and reduced tows to keep the freight market extra tight during the busy season. Again this week, the Fed raised interest rates by another 75 basis points as they continue the fight against inflation.
Corn yields seem to be a bit all over the place this year. Over in the Delaware area, some are reporting this is the best corn they have ever raised, while others to the south were extremely disappointed in the harvest. This year, we seem to be fighting that nasty V word again in the corn. Vomitoxin seems to be all over the place, much like the yield. It seems to be really bad in some areas, while other areas don’t seem to have nearly the issues. This will wreak havoc on some marketing plans simply because some markets just cannot take it. This is an ongoing development that continues to evolve more each day.
Next week the USDA will release its monthly supply and demand updates. It’s always interesting to see what tweaks they make to the numbers. As always, have a great weekend, and thank you for your business.
Haylee VanScoy
Grain Merchandiser, Upper Sandusky (Region 2)
A volatile week of ups and downs to start off the month of November. Over this past weekend, Russia withdrew from the Ukrainian grain export corridor agreement shocking the markets Sunday night into Monday, only for Turkey’s president to reverse course on Wednesday and state that Ukraine will continue to export grain, at least until the November 19th deadline. Also on Wednesday, the Fed had another rate hike of 75 basis points, which was to be expected and further strengthened the US dollar this week. As a result, the US continues to be priced out of the global marketplace with another underwhelming week of export sales. Headlines focused on China on Thursday, where we saw that they approved Brazilian corn imports and rumors swirled around the possibility of China easing their strict covid policies. Hold onto your hats for next week with the election on Tuesday and the November WASDE on Wednesday. Hope you all have a great weekend!
Lisa Warne
Grain Merchandiser, Marysville (Region 4)
Good afternoon! Even with some heavy fog this week, we’ve made big strides in corn harvest. Comparing Mechanicsburg’s corn number today versus our five-year average, we’re about 5% ahead and 15% ahead of last year’s corn harvest progress! While we may have gotten off to a slow start at the beginning, we’ve managed to have a successfully speedy harvest together so far.
The pendulum swing in the market earlier this week was headline driven by Russia’s departure and then surprising return to the export agreement in the Black Sea region. Corn is aiming to finish the week mostly unchanged, while soybeans are supported by the soy complex. Soy oil is sitting at a 5-month high with the help of diesel demand pushing renewable diesel and vegetable oils higher. To take advantage of volatile swings in the market, be sure to place target offers with us in case the rally is short-term.
I’ve started to spend more time at the Marysville Ag Campus (MAC) this week, and it’s been nice to catch up with familiar faces and meet some of you for the first time. I’ll be splitting my time between Mechanicsburg and MAC for a couple more weeks, but plan to be permanently at MAC around Thanksgiving. Have a great weekend and we’ll chat next week!
Ralph Wince
Grain Merchandiser, Canfield (Region 5)
Good Afternoon. Next Wednesday is another USDA crop update, and ATG has corn and bean carryouts rising slightly. Nothing about that changes the overall picture. Beans are all but done here in NE Ohio, and corn is moving right along. This fall harvest season has been one of the best ever from a weather standpoint. Farmers have taken full advantage of this wonderful weather. A lot of fall tillage is also getting done, which should help with spring planting next year. As far as prices go, we continue to stay in a pretty narrow trading range. From this week’s news, Russia said they would be pulling out of the agreed safe passage in the Black Sea, and then a couple of days later, they retracted those comments - we see how that can affect the markets. On Monday, wheat was up +.53 cents, and by Wednesday, back down -.56 cents. That shows how volatile these markets can be on any given day. As we move away from harvest, please continue to watch those markets, and have some targets working for what you have in the bin and also for next year's crop. Have a great weekend and enjoy the weather. There are not many of these kinds of weekends left before the winter season sets in.