Weekly Crop Commentary - 12/22/2023
Dec 22, 2023
Director of Grain Purchasing
As the end of 2023 is upon us, I want to express my gratitude to those of you who have tirelessly worked toward another successful harvest season. This fall didn’t pass without its fair share of challenges and triumphs both within Heritage and on the farm for many of you, but we couldn’t have done it without each other. I want to thank all of our amazing customers for another great year. We appreciate your continued partnership and trust in our services and we look forward to serving you in 2024!
May the New Year ahead be filled with prosperity and continued success. I wish you and your families a very Merry Christmas and a Happy New Year!
Grain Merchandiser, Kenton (Region 1)
Merry Christmas! With a forecast of 55 degrees, it won’t feel like Christmas but I’m not complaining. Markets are not doing a lot. Traders are watching the South American weather closely. Scattered rains continue throughout Brazil, we will see what kind of coverage they get on Tuesday. For now, exports seem decent for corn and beans, but wheat is lagging. Rail closings at the US and Mexican border will hurt corn exports if they are not reopened soon. Some reports say there are about 10,000 railcars sitting on either side. The longer this lasts the farther the backup will get. I wish I had some cheerful news for the market, let’s see what next year brings.
To all our customers: Every year comes with its challenges and victories, and you’ve been with us every step of the way. Thank you for keeping us in your corner! Whatever this year brings, we’ll conquer it together. Happy New Year!
Grain Merchandiser, Upper Sandusky (Region 2)
Good afternoon, Happy Friday, and Merry Christmas! 60 degrees and a chance of rain on Monday looks more like a spring day instead of Christmas, but I will take it! Markets have been relatively quiet this week with not much movement. The only real notable movement has been New Crop Beans. 2024 fall beans fell 20¢ from last Friday putting them in the 12.12 cash price range. Getting dangerously close to numbers that start with 11.
Staying on the topic of beans, Brazil was late to plant this year and does not look like they will be producing a record crop due to dryness. Trade estimates are continually lowering soybean yield and production numbers, yet the price of beans has been at a decline the past month. Why is that? The answer is that Argentina is having an above-average year, they are looking to double their production from last year (not a huge shock considering last year's devastating drought, but the numbers are above average). Paraguay and Uruguay are also looking to see production increases. These three countries could easily fill the void of a decrease in Brazilian production for beans of up to 12 million metric tons. Brazil is the heavy lifter in South America, but we can not forget about the other three countries.
As a reminder, Upper Sandusky will be open Tuesday through Friday for the next two weeks. I hope everyone has a Merry Christmas and enjoys time with family and friends!!
Grain Operation Manager, Urbana (Region 3)
It was the night before Christmas and all through the house, not a creature was stirring not even a mouse… This could be the grain markets for the last several weeks. Harvest has all but completed across the country and the crop is put away in the bin.
It seems today that we are very range-bound on corn and soybeans. I was talking to a customer the other day and I was telling them that this is the type of market you get when supply and demand kind of match up. There is no reason for the speculator to jump into the market today as the chance of a big move one way or the other seems remote. The crop in South America is progressing, as they seem to be getting rains as they need them. It may not be perfect but as we saw here this year, it does not have to be perfect to make a good crop.
There is carry forward in the corn market as we have a very large crop in the bins today so the market is wanting to carry forward. Soybean spreads have tightened up greatly in the last couple of weeks so there is not the incentive to carry that crop forward. Today we are looking at 25¢ to July which will not cover the interest cost on a 12.50 crop. I cannot tell you today when it is going to be a good time to sell what you have stored. That is a decision you will have to make. If we don’t see weather issues arise in South America I see the markets sideways for the foreseeable future.
I wish you all a Merry Christmas and a prosperous New Year.
Grain Merchandiser, Marysville (Region 4)
Merry Christmas! The grain market has been flashing mostly red this week, unfortunately, but we’re seeing a little green on the screen to end the week. Trade volume is comparatively very light today as many are in holiday mode. I anticipate choppy, sideways trading for the next short week as well.
In a story to watch concerning corn export trade, two rail crossings at the Texas/Mexico border have been shut down by the U.S. due to an increase in migrant crossings. With Mexico being our largest corn export destination, this could cause major disruptions in corn movement. It’s thought 10,000 railcars are sitting on either side of the border with other trains throughout the country not moving south as they should be.
For those of you still calculating monies needed in 2023, be sure to let your local branch know early next week so we have time to write checks, cancel or roll deferred payments – if needed, and get final settlements done for the year. We can also run End of Year reports for you on grain payments and loads reports (Proof of Yield). Enjoy your time with family and friends this weekend. Thank you for a successful 2023 and best wishes to you all in the New Year!