Weekly Crop Commentary - 12/9/2022
Dec 09, 2022
Ed Nienaber
Vice President, Grain Division
The USDA will be releasing updated supply/demand figures today at noon. While it looks like we will see little if any changes to the balance sheet, I will defer to my colleagues to fill you in below. The soybean futures have been the feature trade this week. We have added close to fifty cents to the cash price on beans, while corn is steady to unchanged. Bean strength is due to issues with planting in Argentina’s on-going drought. They are well behind normal pace for this time of year. In addition, market improvement came from recent purchase of US beans and meal from China for December-January shipment. With news of the Covid restrictions in China being lifted, market activity for commodities has picked up. Corn continues to trade in a very narrow trading range and as stated last week, local demand for just in-time bushels is doing it’s best to keep bushels moving. The final crop production figures for the 2022 harvest will be released on Thursday, January 12 and we look for adjustments to the supply/demand balance sheet at that time.
Wes Bahan
Director of Grain Purchasing
What a wild week in the bean market. The USDA flashed several sales during the week totaling 1.47MMT or 54 million bushels to be shipped this marketing year. We have not had activity like this for quite some time, and it was exciting to see. Crush margins both domestically and internationally are very strong, making for good competition. Not only did we see a 55-cent rally in the futures markets, but basis has also been working its way higher, and the calendar spreads are starting to firm again. These are all indicative of a bullish market sentiment. We are hearing reports of dry weather in South America that is also adding to the momentum. Brazilian-planted acres are record once again with more acreage coming into row crop production, but we still won’t know the crop size for a few more months. The corn market on the other hand seems to have no real story. The export market is virtually nonexistent, which isn’t that uncommon for this time of year. The processor market spiked up for a minute but seemed to find adequate selling to bridge the gap to January deliveries. With the slow pace of exports, we saw the USDA back off corn export projections by 75 million bushels. Now all eyes will turn to the January reports where we will get the final production numbers from 2022 and our first quarter’s usage numbers. Have a great weekend.
Lou Baughman
Grain Merchandiser, Kenton (Region 1)
Today’s report had little change to give any direction to the market. The US and world carryout varied slightly from the November report and there was no change in South American production. Corn futures had little change from last Friday because of lack of demand but the basis narrowed a nickel. Beans increased about fifty cents for the week because of the improved export sales last week, the flash sales yesterday, and the news of Argentina burning up. Wheat, like corn, struggled without any friendly news.
Haylee VanScoy
Grain Merchandiser, Upper Sandusky (Region 2)
The corn market finished relatively unchanged for the week, as we failed to push up through 6.50 CH and continue to be range bound without a clear direction one way or the other. Beans on the other hand, saw a nice December rally gaining nearly 40c and approached the 15.00 SF mark before backing off after today’s lackluster supply and demand report. US soybean carryout remained unchanged with no changes to South American production, however soy oil saw a reduction in exports due to historically low export sales. US corn also saw a 75 mil bu reduction in exports due to a lack of demand and high US prices, which resulted in an increase to US corn carryout. Will we see more drastic adjustments come January’s report? South America is expected to plant record acres and although Argentina has been dry lately, we all know Mother Nature can change on a dime. Continue to reach out to your local merchandiser and discuss your marketing plans for both old crop, whether on DP or in the bin, and new crop for 2023! Cost of inputs don’t appear to be going down, so let’s be proactive in locking in profits where we can. Hope you all have a wonderful weekend!
Steve Bricher
Grain Operation Manager, Urbana (Region 3)
We are one week closer to 2023 and things are quiet. The farmer for the most part has harvest completed and is waiting until after the new year to do much of anything with grain movement.
Corn took at bit of a hit last week and has yet to recover. Corn demand is not good and that is reflected in the current price, not that 6.00 plus corn is bad, but I would have thought with all the talk earlier this fall about how bad the crop was out west we would have seen a stronger market by now. Export sales have not been good, and Brazil is shipping corn to China. These two things are cutting demand for corn and at some point, the customers who used to buy corn from Brazil will have to find a new place to get corn and we may see some export demand come from new places.
Soybeans have rallied this week as demand is good and weather in Argentina is dry. These two things along with a big move in soybeans meal, over 50.00 a ton higher since November 29, has pushed the market close to the highs that we saw in early September. We will have to see if demand continues and if we can find buyers for this market. I have had a few customers start to put some new crop 23 soybean sales on as we have seen prices over the 13.50 level.
I don’t write about wheat often but is not helping the corn market currently. July 23 wheat is down almost 2.00 a bushel from early October. The continued movement out of the Black Sea area and decent crop in Australia have weighed on this market. We will see if the dry weather in the plains continues this winter and if we can rally this market at some point.
As you are getting inputs purchased for next spring, we need to start getting offers in to get next year’s crop sold. Also, consider what price you want for what is currently in bins. Let’s talk and get a plan in place. You don’t have to sell everything in one day, but it is a good idea to have a plan in mind.
Lisa Warne
Grain Merchandiser, Marysville (Region 4)
For the second week in a row, nearby soybeans have reached a new two-month high. While they are losing some steam this afternoon, they are still forty cents better on the week. Corn remains rangebound due to poor exports, looking to close the week just a few cents better. Wheat is down again, having lost over $1.75 a bushel since November 1st.
USDA announced export flash sales for soybeans three days this week, totaling 54 million bushels to China and unknown. Meanwhile, in today’s WASDE report, USDA reduced corn export projections by 75 million bushels, as most traders expected. The markets head into holiday mode now where volume will probably be thinner as traders await the January production report.
More customers have started looking at Fall 2023 prices and are either locking in small amounts or placing target offers. Consider your inputs and calculate your profitable levels to see if current prices will offset some of your monetary risk. Have a great weekend!
Vice President, Grain Division
The USDA will be releasing updated supply/demand figures today at noon. While it looks like we will see little if any changes to the balance sheet, I will defer to my colleagues to fill you in below. The soybean futures have been the feature trade this week. We have added close to fifty cents to the cash price on beans, while corn is steady to unchanged. Bean strength is due to issues with planting in Argentina’s on-going drought. They are well behind normal pace for this time of year. In addition, market improvement came from recent purchase of US beans and meal from China for December-January shipment. With news of the Covid restrictions in China being lifted, market activity for commodities has picked up. Corn continues to trade in a very narrow trading range and as stated last week, local demand for just in-time bushels is doing it’s best to keep bushels moving. The final crop production figures for the 2022 harvest will be released on Thursday, January 12 and we look for adjustments to the supply/demand balance sheet at that time.
Wes Bahan
Director of Grain Purchasing
What a wild week in the bean market. The USDA flashed several sales during the week totaling 1.47MMT or 54 million bushels to be shipped this marketing year. We have not had activity like this for quite some time, and it was exciting to see. Crush margins both domestically and internationally are very strong, making for good competition. Not only did we see a 55-cent rally in the futures markets, but basis has also been working its way higher, and the calendar spreads are starting to firm again. These are all indicative of a bullish market sentiment. We are hearing reports of dry weather in South America that is also adding to the momentum. Brazilian-planted acres are record once again with more acreage coming into row crop production, but we still won’t know the crop size for a few more months. The corn market on the other hand seems to have no real story. The export market is virtually nonexistent, which isn’t that uncommon for this time of year. The processor market spiked up for a minute but seemed to find adequate selling to bridge the gap to January deliveries. With the slow pace of exports, we saw the USDA back off corn export projections by 75 million bushels. Now all eyes will turn to the January reports where we will get the final production numbers from 2022 and our first quarter’s usage numbers. Have a great weekend.
Lou Baughman
Grain Merchandiser, Kenton (Region 1)
Today’s report had little change to give any direction to the market. The US and world carryout varied slightly from the November report and there was no change in South American production. Corn futures had little change from last Friday because of lack of demand but the basis narrowed a nickel. Beans increased about fifty cents for the week because of the improved export sales last week, the flash sales yesterday, and the news of Argentina burning up. Wheat, like corn, struggled without any friendly news.
Haylee VanScoy
Grain Merchandiser, Upper Sandusky (Region 2)
The corn market finished relatively unchanged for the week, as we failed to push up through 6.50 CH and continue to be range bound without a clear direction one way or the other. Beans on the other hand, saw a nice December rally gaining nearly 40c and approached the 15.00 SF mark before backing off after today’s lackluster supply and demand report. US soybean carryout remained unchanged with no changes to South American production, however soy oil saw a reduction in exports due to historically low export sales. US corn also saw a 75 mil bu reduction in exports due to a lack of demand and high US prices, which resulted in an increase to US corn carryout. Will we see more drastic adjustments come January’s report? South America is expected to plant record acres and although Argentina has been dry lately, we all know Mother Nature can change on a dime. Continue to reach out to your local merchandiser and discuss your marketing plans for both old crop, whether on DP or in the bin, and new crop for 2023! Cost of inputs don’t appear to be going down, so let’s be proactive in locking in profits where we can. Hope you all have a wonderful weekend!
Steve Bricher
Grain Operation Manager, Urbana (Region 3)
We are one week closer to 2023 and things are quiet. The farmer for the most part has harvest completed and is waiting until after the new year to do much of anything with grain movement.
Corn took at bit of a hit last week and has yet to recover. Corn demand is not good and that is reflected in the current price, not that 6.00 plus corn is bad, but I would have thought with all the talk earlier this fall about how bad the crop was out west we would have seen a stronger market by now. Export sales have not been good, and Brazil is shipping corn to China. These two things are cutting demand for corn and at some point, the customers who used to buy corn from Brazil will have to find a new place to get corn and we may see some export demand come from new places.
Soybeans have rallied this week as demand is good and weather in Argentina is dry. These two things along with a big move in soybeans meal, over 50.00 a ton higher since November 29, has pushed the market close to the highs that we saw in early September. We will have to see if demand continues and if we can find buyers for this market. I have had a few customers start to put some new crop 23 soybean sales on as we have seen prices over the 13.50 level.
I don’t write about wheat often but is not helping the corn market currently. July 23 wheat is down almost 2.00 a bushel from early October. The continued movement out of the Black Sea area and decent crop in Australia have weighed on this market. We will see if the dry weather in the plains continues this winter and if we can rally this market at some point.
As you are getting inputs purchased for next spring, we need to start getting offers in to get next year’s crop sold. Also, consider what price you want for what is currently in bins. Let’s talk and get a plan in place. You don’t have to sell everything in one day, but it is a good idea to have a plan in mind.
Lisa Warne
Grain Merchandiser, Marysville (Region 4)
For the second week in a row, nearby soybeans have reached a new two-month high. While they are losing some steam this afternoon, they are still forty cents better on the week. Corn remains rangebound due to poor exports, looking to close the week just a few cents better. Wheat is down again, having lost over $1.75 a bushel since November 1st.
USDA announced export flash sales for soybeans three days this week, totaling 54 million bushels to China and unknown. Meanwhile, in today’s WASDE report, USDA reduced corn export projections by 75 million bushels, as most traders expected. The markets head into holiday mode now where volume will probably be thinner as traders await the January production report.
More customers have started looking at Fall 2023 prices and are either locking in small amounts or placing target offers. Consider your inputs and calculate your profitable levels to see if current prices will offset some of your monetary risk. Have a great weekend!