Weekly Crop Commentary - 2/9/2024

Wes Bahan
Vice President, Grain Division

Good afternoon, I hope you are all able to enjoy this weather. It was another big week on the news front. We did have the USDA report a couple of corn sales in the export market totaling 355,000 MT. One was to Mexico, and the other is to Columbia. That one is interesting, in the fact they used to be a big customer of the US, but the last few years they have gotten their needs covered from Brazil. The barge market didn’t seem to be impressed much by them as it has continued to grind lower as the week progressed. Many have taken advantage of the good weather and picked up the pace of hauling, and the ethanol plants are confirming that in being closed more than they were open this week. The USDA released its monthly supply and demand report yesterday, and no real changes were made. The market will continue to price a 2.1-billion-bushel carryout going forward. On the soybean front, we continue to see the export market drag along, and yesterday’s report did show a reduction of 35 million bushels from the export estimates yesterday. That number went right on to the bottom line taking ending stocks now to 315 million bushels. The bigger news was the fact they added 2 MMT to last year's production in Brazil and did not reduce this year’s production estimate near what the market had anticipated. The export market in Brazil has rebounded a bit this week, but they are still much cheaper than US-origin beans to the world market. Soybean meal prices are making new lows, and this is continuing to squeeze crush margins here. Chinese crush margins are even worse as they are negative in a big way. If the folks who use the product aren’t making money, then their demand for said product drops drastically. We are in the process of establishing our spring crop insurance prices and so far, we have corn at $4.76 and beans at $11.75 ¾. Corn is $1.15 lower than last year's and beans are an even $2.00 lower. The next market-moving report will be out on March 28th as we get a look at quarterly grain stocks and prospective planting intentions. The grain origination team will be hosting marketing meetings at several locations in the next few weeks, so please check out our website for the date and time of one in your area.

Haylee VanScoy
Director for Grain Purchasing

It’s sure been nice this week to enjoy sunny and 60-degree weather! Too bad we’ll be back in the 30s and 40s next week. Markets have continued to be pretty lackluster this week as we follow the bouncing ball lower. CH corn is posting new lows today at 4.28 with nearby beans having found their recent low on Wednesday at 11.79. We’ve had a couple flash corn sales early in the week and some discrepancies between CONAB and USDA Brazil and Argentina production numbers, however there’s not been a whole lot of other noteworthy headlines. The US dollar continues to rise, the February WASDE report yesterday was not favorable to US grains, South America weather is risk adverse, safrinha corn planting is over 20% complete, and bean harvest is nearing 20% in Brazil.

As for the wheat market, we’ve seen some recovery today and are hovering around the 20-day moving average just shy of 6.00. Heritage Cooperative is offering a Wheat Averaging Program this year that will run from March 1 – May 31. This historically price-friendly timeframe provides an opportunity to diversify your sales and enroll bushels over a set pricing window to spread out that risk. If you are interested in learning more about this program, please contact your local grain merchandiser. The deadline to enroll is 2/28/24. Enjoy the Super Bowl this weekend and hope you all have a Happy Valentine’s Day next week!

Lou Baughman
Grain Merchandiser, Kenton (Region 1)

Another report has come and gone, and we remain in a sideways market. There seems to be a large discrepancy between USDA and CONAB with the size of the Brazilian crop. Which one is the closest? South America forecast has improved for Argentina after having hot/dry weather. I will say our February weather has been glorious, making life easier this lambing/calving season. Exports are still slow for wheat and beans; corn still is getting flash sales that is helping but not enough to help the markets. Our Marketing Outlook Meeting is February 20th get your RSVP in on Monday the 12th have a good weekend.

Lisa Warne

Grain Merchandiser, Marysville (Region 4)

What a beautiful few days we’ve had! With the grain markets, I feel like a broken record each week – there’s nothing to get excited about. Cash corn has lost over a dime this week, but due to a basis improvement of a nickel, cash soybeans are up a few cents compared to last Friday’s close.

USDA’s WASDE report on Thursday was mostly a non-event by the time the market closed, though the domestic numbers were definitely more on the bearish side. US carryout increased for all 3 major commodities due to demand reductions. USDA did not change Argentina’s production numbers, but they did reduce Brazil’s corn and soybean estimates. They have Brazil’s soybeans at 156 million tonnes, while CONAB (Brazil’s version of USDA) has the crop pegged at 149 million tonnes. Which will be closer to the realized production?

As many of us have indicated before, with a minimal bullish outlook, it’s time to really consider if you need to let those harvest bushels on Delayed Price go, or continue to risk further decline. It might depend on when you need funds flowing and how long you’re willing to wait on a rally. I know I can’t hold my breath long enough to wait on a significant rally though. Enjoy the warmer weather before we're back in the 30s soon enough!

Ralph Wince
Grain Merchandiser, Canfield (Region 5)

Good afternoon, I hope all of you are doing well. It’s been really nice to have a reprieve with the weather this week. It sure felt a lot like spring was just around the corner, but all we have to do is look at the calendar and realize that today is just February 9th. But we will take it regardless!!! Yesterday we received the Feb update from USDA. It did nothing for the bulls and their hopes that we would see a change in the carry-out stocks. Beans got the biggest surprise with ending stocks going from 280 million bushels in Jan’s report up to 315 million bushels here in Feb. With our exports lagging so bad it was just a matter of time before ending stocks were increased.

The only positive news we have going for us is that the funds have accumulated a sizeable short position in corn, beans, and wheat. If they would receive a technical signal that told them that they are too short and they jump back in the market to buy back some of those short positions, we could get a bump in prices on any given day. If we see that, I feel like we need to be a seller of some of what we are holding. Please don’t think that could be the start of a turnaround. The next number that could have an impact on the markets doesn’t come until March 28th when we get what USDA thinks our 2024 crop acres will look like. There will need to be a big decline in corn acres for that to do a lot for our current price.

Lastly, we have some programs out there that could help raise your weighted average of what you still have to sell. Please feel free to give any of us a call to discuss the options that we have available. We would all be glad to talk things over with you. Have a wonderful weekend and enjoy the current weather we are having!!!