Weekly Crop Commentary - 2/24/2023
Feb 24, 2023
Vice President, Grain Division
We are rapidly coming to the end of February and Mother Nature is reminding us we are in OHIO. Hard to believe in just six weeks we could see planters in the fields in southern Ohio. The Agricultural Outlook meeting took place this week and is reporting 91.0 million acres of corn and 87.5 acres of beans is expected to be planted this year. While these are early guesstimates, it falls in line with trade expectations and very close to last year’s planted acres. The USDA will release prospective planted acres at the end of March. Assuming trend line yields, which are optimistic at this time, we will see an increase in both corn and bean carry-over figures for crop year 2023-24. The funds continue to hold the long position in the corn market; however, we are not seeing buying this week as corn has lost about twenty-five cents for the week. Meanwhile beans are currently down only a fraction on the board for the week. We saw a nice improvement on Tuesday, coming off the three-day weekend. Support coming from frost warnings in Argentina, is only adding to the continued drought conditions that they have experienced this year. Brazil production continues to increase as combines hit the field. Looks as if Argentina’s shortfall will be offset by bumper crops in Brazil. Cash basis continues to see lack of support as we move through the winter months. Current projected carry-over figures could become problematic if we have weather issues with spring plantings and if ‘you know who’ comes looking for corn. Have a great week and stay safe.
Director of Grain Purchasing
February has certainly flown by and we’re nearing the end of the February price discovery period for crop insurance. Currently, we are at $5.95 on CZ23 corn, 5c higher than the 2022 February price. The projected bean price is 59c lower than last year, coming in at $13.74 SX23. Next Tuesday we’ll see where we finish up, but I encourage you to keep an eye on this and reach out to your local merchandiser to evaluate your marketing plans for new crop corn and beans. Regarding old crop, as of this week nearby cash bids are trading off the May futures and many of our branches have started free DP if you’re wanting to get some stuff moved out of the bin on these nicer weather days. Hope you all have a wonderful weekend!
Grain Merchandiser, Upper Sandusky (Region 2)
Good afternoon and happy Friday! Hard to believe that this is the last week of February already. The warmup in weather this week teased us into thinking it was spring already. The markets also teased us early this week as Tuesday saw old crop beans get above $15.30 in Upper Sandusky for the first time this year.
The continued pressure with China has ramped up in the last couple of weeks and some early projected acres planted has the U.S. pegged at 91 million acres, up from a year ago. These led to the corn market falling down the past couple of days. Brazil is more than 25% done with bean harvest but is falling behind compared to years past, thanks to bountiful rains. Big news out of Argentina is that they had a frost (yes, a frost) early in the week, to go along with their continued drought, which has caused bean prices to rise early in the week. A frost this time of year in Argentina would be like Ohio getting a frost in early August.
Some local news is that our new 750,000-bushel bin is officially up and running. We are also offering free DP, so as the weather starts to turn it wouldn’t be a bad idea to start to think about hauling in some corn or beans. Have a great weekend!
Thank you and have a great weekend!
Grain Operation Manager, Urbana (Region 3)
We saw spring-like temperatures this week and farmers getting the itch to get something done. We have had good grain movement this week with a combination of good weather and free DP.
Corn took a little hit on Thursday. No real reason other than we are coming to the end of the month and seeing ethanol stocks build. The saying goes, a bull market needs to be fed every day. We have not seen a bull market in corn, we have been sideways, but at some point, the market is going to need some news to push it higher. We have plenty of corn around and exports have not been good to say the least. If we continue to see reduced demand and planting goes as expected, it is going to be hard to see corn going much higher.
Soybeans for the most part have held their own. Argentina has a problem as their soybean crop keeps getting smaller. This is mostly being offset by a much larger crop than normal in Brazil. We have seen some just-in-time soybean sales as the delay in loading in Brazil is moving a few boats to the US. Like corn, we are going to need some news to push this market much higher. The Argentine dry weather is starting to wear itself out and we will need fresh news to make this market go higher.Lisa Warne
Grain Merchandiser, Marysville (Region 4)
Good afternoon. The short trading week started off on a good foot Tuesday, but USDA’s announcement on Thursday at the Ag Outlook Forum put a huge damper on the corn market. For their initial acreage for the 2023/24 crop year, they have 91.0 million planted acres of corn penciled in with an average yield of 181.5 bushels per acre. Their S&D table shows ending stocks at 1.887 billion bushels, which would be the largest since the 2019 crop, if realized. To reach their 15.09 billion bushel production number though, we would need an ideal planting and growing season and you all know how ideal the weather always is!
The soybean initial acreage is pegged at 87.5 million acres, the same as last year, with an average yield of 52.0 bpa. This equates to a 4.5 billion bushel production with ending stocks of 290 million bushels, slightly more than the 2021 crop. It’s important to keep in mind that these figures from the Outlook Forum are just a baseline starting point formulated by ag economists. The NASS’ farmer surveys will be used to calculate acreages released in the key March 31st Prospective Plantings report.
The market has been in such a sideways pattern that perhaps it was just looking for any data to react to for movement. The markets broke below some key support levels, aiding the bearish data with further declines. There’s bound to be opportunities again for your old crop, but don’t hesitate to pull the trigger if we get back to the high end of the recent ranges. Have a great weekend!
Grain Merchandiser, Canfield (Region 5)
Good afternoon. Markets continue to lose ground today after the release of acres and yields at yesterday’s USDA Outlook Forum. The USDA raised the average corn yield per acre to 181.5 bu. If that happens it would be a record. Corn acres were projected at 91 million. After doing the math that would put carryout for the 23-24 marketing year at 1.887 billion bushels. Once the market saw those numbers, we saw a pull back from recent highs. There is a long time between now and fall harvest, but we are starting to see what prices could look like if this plays out. With the cash market being about $1.00 per bushel higher than the futures market there will be a lot of debate around where we need to be as we get into the growing season.
I have been listening to some long-range weather forecasters and both believe the La Nina that has been in place is finally breaking down and we are moving towards an El Nina as we approach growing season. Additionally, both said that the neutral period between the two is uncertain however we may see a relatively normal growing season through the heart of the corn belt this year. If that’s the case, it could lead to a record crop. That’s why the market is torn right now regarding where we should be with old crop and new crop. I still believe that we will stay in a sideways pattern for the next couple of months until we see what happens with the weather.
For those that have grain still to sell this year please pay attention to what happens over the next couple of months. If you want to hold some of last year’s crop, I would be cautious in determining how much to hold on to. We have been in profitable levels recently and I believe that to get to the next level we need some kind of news that will move traders into a more bullish position. Have a wonderful weekend.