The futures market in Chicago is pushing grains to new highs this week. Soybeans have added another fifty cents moving over the twelve-dollar level for the first time since June of 2016. As new sales to China have slowed, we continue to export our current commitments to China. However, other foreign buyers are looking for nearby beans to meet their own demand. Weather issues in the southern hemisphere and fears of a late harvest have sent folks to the US for beans to fill the void. A continuation of the dry forecast in Argentina has funds wanting to own soybeans on paper. The nearby futures market in corn and soybeans have flat-lined, currently very little carry if any in price. Thus, it will the job of the local basis to provide carry-in prices moving forward. Most, if not all, end-users are buying hand to mouth and will continue to be looking for bushels to meet their demand. We are seeing better crush margins in soybeans and this is supporting local basis, while river levels show continued strength. The market will be anticipating the January 12 WASDE report for adjustments to the world balance sheet. We could be just at the beginning of a very interesting grain marketing year. Please continue to be safe and enjoy the Holiday Season! Merry Christmas and Happy New Year!
Good afternoon. It seems a bit weird, but this will be the last publication for 2020. This week was once again packed full of news. Export inspections that were out on Monday are still showing a massive amount of soybeans being shipped. There is even some talk that some of the Chinese purchases of early harvested Brazilian beans are being changed to US origin. We also did see an uptick in sales of old crop soybeans as well. With 39 weeks remaining in the marketing year we have 90% of the USDA estimate on the books. This could make quite a dynamic as we get further into the year. Basis level is steady as exporters and end-users have enough coverage for now. Corn export sales were big this week at just under 2 MMT. This is proving that once the bean program slows down we will move right into shipping corn around the world. The ethanol industry continues to struggle as cheap crude oil is keeping margins in the red. With the whole vomitoxin issue, the Ohio ethanol industry is having trouble moving the DDGS. In this week's weekly energy report, we did see a slow down in ethanol production and an increase in ethanol stocks. Corn basis has also remained steady for corn, but there are some end users that are having to show a premium for some spot bushels as harvest has ended and bin doors are closed up. We do need to keep an eye on the managed money position in the markets as they are still very long both corn and soybeans. I would like to thank all of you for the business this past year and want to wish you and your families a Merry Christmas and Happy New Year.
Happy Friday and good afternoon! Soybean prices sure have rallied this week hitting $12.00 cash beans here at our Upper Sandusky facility. Bullish soybean news of the week included the following from StoneX:
Happy Friday! As the dollar index fell to two and a half year lows on Thursday, nearby corn and soybean futures were able to break past the psychological and technical resistance levels of 4.30 corn and 12.00 beans. For soybeans, this is the highest close of the spot month in over six years. These futures prices of 4.30 and 12.00 now become the support level. It’s key we stay above these futures levels as the market closes later today, which seems likely. Locally, we have seen bean basis improve a nickel while corn basis weakened a nickel again this week. As of 1:00 today, our cash soybean bid has gained a hefty 60+ cents on the week and corn is also up near a dime from last Friday’s bid. With the increased challenge of marketing corn with vomitoxin, Heritage has implemented discount rates for corn with levels above 5.0 ppm. Those discounts can be found on our website or Facebook and Twitter pages. As we work through yet another obstacle this year, I’d like to thank you in advance for your patience as we test your corn upon delivery. With this being the last publication of commentary for 2020, I want to wish you all happy holidays. Please know that we appreciate you and I hope you enjoy this time with your close circle of loved ones. Merry Christmas and Happy New Year!
This will be my last market comments for 2020. What a year. We started off with a big South American crop that pushed soybean prices lower. We then had a virus spread around the world with countries locking down and travel come to a halt which pushed corn prices to some of the lowest levels we had seen in years. We had then had a storm come across the Midwest and flatten a corn crop. We had China come to the market in a big way and start to buy anything they could get their hand on. We saw corn and soybeans prices rally from multi year lows to multi year highs in a matter on 90 days. As of last night we has corn and soybean futures on their highs of the year and pushing higher today. 2021 is going to be interesting as we install a new president and we vaccinate a country for the virus. We will have to see how fast the economy picks back up as people get vaccinated and business and travel open back up. We will continue to work with us as we make space to take your crop out of the bin. With the good prices there is more working its way into that pipeline so please be patient we will do our best. We can all be thankful that we made it through 2020. I pray that you and your families have a safe and Merry Christmas and a Happy New Year’s.