The CME futures markets have moved off their record seasonal highs in the past two weeks as southern hemisphere weather has improved and crops have all been planted. While LaNina continues to be a threat to the final production figures, today it has taken a back seat. We continue to see excellent exports and while we are running ahead of prior years the market is waiting to see if China will continue to buy America or will now wait on South American bean harvest. Corn futures price has lost about a dime on the week and beans are down close to forty cents since Thanksgiving, basis continues to stay firm for this time of year. Local demand continues to remain strong as feed, ethanol, and the processor market continue to compete for just in time bushels. The USDA will be releasing updated supply/demand figures on Thursday, December 10, and will have final production numbers on Tuesday, January 12. The January report always seems to come with some surprises and fireworks. Please continue to be safe as we work together to navigate through these challenging times.
Good Afternoon. I hope everyone had a great Thanksgiving Holiday. I’m sure that most experienced a bit of a different than normal celebration, but hopefully, you were able to make the most of it. Harvest came to a screeching halt on Monday as we got our first real taste of winter. I for one was not a fan of it, but we have to deal with it. The corn market this week did have a bit of a meltdown as we tried to push through the highs and all we found were sellers. Not that we have received a lot of bearish news, but the bullish news has not appeared on a daily basis. The big news in the corn market is the whole vomotoxin issue. It seems that all the end users are testing and discounting, or just flat rejecting loads above a certain threshold. This makes for a challenge, but we will all work through it. The soybean market also tried to make new highs but instead found selling instead. Like the corn market, we have not gotten a ton of bearish news, but the bullish news has come to a halt. We did not have a flash soybean sale from the USDA at all this week and the export sales report had us at the bottom side of expectations. We see the funds' long 250k contract of corn and 177k contracts of beans. These are not record longs by any means, but it does show they have selling potential if something should arise. There is a lot of growing season from South America that should prevent a massive sell off for the short term.
Markets took it on the chin early in the week and have leveled off. Ethanol demand is slipping because of Covid restrictions, but export demand remains strong. The main question is if the South American weather will reduce global production to justify rationing with high prices. Brazil forecasts still look very beneficial through mid-month, Argentina’s is a bit sketchier but has some rain forecasted in confined areas.
So far within my grain merchandising position, the questions I get asked the most often are, “What’s happening with the markets right now?” and “What’s going to happen with the markets in the future?”. These are the two-million-dollar questions that everybody wants to know. Although we can never predict what will happen exactly, we can consider factors pertaining to supply and demand, weather, and geopolitics. For those who do not have a Twitter, I highly consider downloading the app for general agriculture and market updates. There are a lot of folks who post great informational material and statistics. Demand and weather seem to be the two dominant factors that take turns in driving the markets. China demand and South American weather are the leading factors in which are driving the market lately. The next Crop Production and Supply & Demand Report will be released next week: Thursday, December 10th. I hope everybody has a great weekend!
The calendar turns to December and the weather sure changed. Normally the first snowfall does not hang around for a week but this one has and brought harvest to a stop. I did have a few guys get started back in yesterday as they try to get 2020 completed. The corn market topped out a week or so ago and has kind of gone sideways as it still is a follower to the soybean market. I was looking back through my daily bid sheets and you will find it hard to believe that the average corn price for November of 2020 and November 2019 was the same at 4.00. We are at good price levels that make us a profit it will be a struggle to get the farmer to open his bins at this point without a reason to go to the bin. We have seen the farmer sell his soybean crop for the most part and is in a good cash position at this time so he is waiting on a reason to sell more and today the market is not giving him one. The next thing is what you plant next year. With 2021 soybeans around 10.00 and corn at 3.70 it should push us to more soybeans. We will have to see if the market makes an adjustment to make sure we do not lose too many corn acres next year. We all want to put 2020 behind us so as we look to next year it is time to set down and start making a plan to make 2021 a profitable one.
Good Afternoon, I hope everyone had a nice Thanksgiving. This week saw the grain markets a little more choppy than we have seen lately. We have been overdue for a little correction in the bean market. I thought that it was very interesting that Jan beans during the month of Nov only closed lower 5 times during the whole month and the net gain for the month was $1.12 cents. That is very remarkable to me to have that big of a pick-up in one months’ time. So to see a pullback and some profit taking by the funds is not at all surprising. Today’s forecast for South America has Argentine looking dry in the 6-10 days with Brazil looking for rain to favor the central and northern areas leaving dryness to expand in the south over the next 6-10 days. The weather forecast will continue to play a role in the markets over the next month or two. We will get another update from USDA next Thursday as well. But the bigger USDA report on final production numbers for the 2020 growing season comes in Jan. As far as corn goes we have been a little more choppy over the last month. For us here in the eastern part of the state yields were all over the place. It just depended when and how much rain you got. Basis levels on corn have continued to strengthen over here. The Eastern Pa area did not have very good yields and the feed mills in Eastern Pa are really searching for corn already and that has pushed up our local basis. I look for that to be the case a good part of the year. If beans stay strong then corn will probably stay strong as well. If beans soften corn will more than likely soften some as well. As we look towards the 2021 crop year there will continue to be a play for acres so stay tuned as we march past the first of the year. Have a great weekend!!!!
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