Weekly Crop Commentary - 12/8/2023
Dec 08, 2023
Vice President, Grain Division
Good afternoon. Harvest is finally starting to wind down as we are down to the last 5%, give or take, in this area. Yields are still holding up very well and what is in the field seems to be standing well also. The USDA came out today with updated supply and demand numbers with only a couple of minor adjustments being made. Now the focus turns back to the weather in Brazil. China was an active buyer of US Soft Red Winter Wheat this week as they look to replace lost domestic production due to weather. Corn basis has been starting to improve as of late. Elevators are still currently dealing with ample supplies, but the amount of sales on the books later is quite lackluster as it was pretty much all of last year. With the market digesting a 2+ billion bushel carry-over the futures markets don’t seem to be attracting many buyers, thus leaving basis to do the work. Bean basis continues to be stagnant as the market is at a crossroads. Brazilian beans are still much cheaper than the U.S., so if the weather is so bad and production is at risk why isn’t the cash market reflecting this? As time progresses the truth will be told and we shall find out which is right.
Grain Operations Manager, Urbana (Region 3)
The markets this week seem to be in the holiday doldrums already. We get a bounce one day and give it back the next. The biggest mover this week was wheat, as we sold a large block to China and pushed old and new crop wheat to the highest prices since last summer. If you have wheat planted we are back over 6.00 for next July's wheat, this may be a good place to get some selling started.
Harvest is all but wrapped up as the last farmers are finishing the corn harvest. I can say in my area the corn yields were as good as we have ever seen. Now the big question is when do we sell old crop corn and soybeans? I do not look for big moves in the market as we are looking at a 2-plus billion bushel corn carryout and South America is looking at a record crop today. If the board does not do the lifting to get you to open your bin doors then basis will have to. We have some good values for corn and beans for the first quarter of the year, I think it is going to take some work to get us over the 5.00 level locally on corn and 13.50 on soybeans. With the yields we had last fall anywhere near 5.00 on corn should generate close to 1000.00 an acre revenue, which is a good number for an acre of corn.
Give us a call and let’s get some offers working for grain that is coming out of your bins.
Grain Merchandiser, Marysville (Region 4)
Harvest is nearing completion as inbound trucks have slowed and we hear the phrase “last load!” a lot more often. Hopefully by this time next week everyone will be done and getting ready for the holidays.
Cash wheat saw a $1.00+ rally between its lows on November 27th and a recent high this past Wednesday. Flash export sale announcements this week of SRW wheat to China totalled 1.12 million metric tons (41.15 million bushels) spurring the rally. Turbulent weather in the Black Sea has caused loading delays of Russian wheat, helping to lift global prices. The contract price for wheat delivered next July is $6+, which is up 60 cents from two weeks ago. If you have wheat planted this fall, maybe consider covering some of your costs.
Today, the USDA WASDE report did not make any adjustments to this year’s U.S. production numbers yet, but that is typical for the December report. The January report is the one to keep an eye on for those revisions. USDA did lower Brazil’s expected soybean production, but not as much as traders had anticipated. Keep your eyes out for the January 12th report. Have a good weekend!