Weekly Crop Commentary - 3/22/2024

Mar 22, 2024

Wes Bahan
Vice President, Grain Division

What another wild week in the grain markets. Volatility is still very high, and even the slightest bit of news, good or bad, has massive implications on prices. Soybeans were especially the case this week. From bottom to top we have seen a one-dollar rally in the cash bean market. We found many producers this week taking advantage of that and getting more on the books. This seems to have provided the processor market ample coverage through April. The export market continues to lag, as Brazil is the cheaper market, and they are gobbling up the fair share of the world market. Soybean exports from the US continue to lag further behind pace than what the USDA had expected, so will we see a pull back in the next supply and demand report?? The corn market is still a domestic market. The processors are actively trying to get every bushel they can before spring fieldwork begins so they can use that time to make room for what is being called the “wall of corn” to arrive. The grain stocks report next Thursday will tell us the story on that. As far as the acreage debate, the market is looking at 91 million corn and 85 million bean acres. Private estimates will begin rolling out early next week on that. The weather this spring will ultimately tell the tale, and we all know that.

Haylee VanScoy
Director of Grain Purchasing

What a wild ride in the grain markets this week. Those that had offers in and working made out pretty well on both old crop and new crop. Unfortunately, nearby beans have been unable to hold on to $12.00+ SK today and corn is holding steady around $4.40. If you have any unpriced old crop, it certainly was worth rewarding this rally.

Also, saw a good bit of farmers selling on new crop this week, however CZ24 tuckered out at $4.80 and SX24 found resistance at $12.16. The 100-day moving average on new crop beans is $12.22, so I’m curious to see what it’s going to take to push up through that level… we’ll continue to keep an eye on South America and next week’s quarterly grain stocks and planting intention reports. Until then, hope you all have a wonderful weekend, and good luck on your already busted brackets for March Madness!

Will Gase
Grain Merchandiser, Upper Sandusky (Region 2)

Good afternoon, and happy best week of the sports calendar, in my humble opinion: college basketball for four straight days in the best tournament of the year. March Madness would be a good term to describe the grain markets the past couple of weeks. Production issues in South America, flash sales and cancelled sales, prospective planting intention estimates, and funds money are the main causes for the up and down we have seen the last couple of weeks. Look for the beginning of next week to field more estimates on planting acres for the upcoming growing season. Big report coming on Thursday; set targets, contract bushels, cover your butt, and manage your risk ahead of the biggest report and marketing day of the year.

A reminder that Heritage is offering the Average Price Programs this year for corn and beans. Reach out to your local merchandiser to learn more about it and to enroll bushels into the program. Have a great weekend, everybody!

Steve Bricher
Grain Operation Manager, Urbana (Region 3)

Welcome to the best time of the year, as far as I am concerned, it is March Madness. My remote will be getting a workout this weekend as I try to watch 3 and 4 games at a time. We saw several upsets on Thursday already as the Kentucky Wildcats got sent packing. The Buckeyes did not make the big show but did pull off a win in their opener.

The grain markets have continued their run from their lows earlier this month. We saw corn and soybeans get back to the best prices we have seen printed in over a month. I am not bullish old corn or beans, so these rallies need to be sold. We are importing beans, as South America is still 1.50 a bushel cheaper than the US. The big rally on Wednesday was likely due to a new crop sale of beans for export and a need to get them covered, but with open interest as low as it is, when someone needs to get something covered, this is what happens.

We will get our next set of reports from the USDA next week as stocks and planting intentions come to the market. I am not bullish prices long term unless we have a planting problem or a major weather problem this summer. If we plant what has been predicted so far, and we are close to trend line, yield carryout stock on both corn and soybeans will go up. That is not bullish prices long term.

Lisa Warne
Grain Merchandiser, Marysville (Region 4)

Welcome to March Madness! If you had an offer in for $12 cash beans, you sold them Wednesday evening in the first hour of the night trade, but that was your only shot for now. Nearby soybeans had a 46-cent trading range this week, and with today’s decline, we’re looking at a lower close than last Friday. Corn remains stagnant, only fluctuating 11 cents on either side of $4 at Marysville. Wheat recovered a quarter this week after fresh lows last week.

With the Fed holding interest rates steady this week, the dollar took a hit on Wednesday and that helped soybeans rally. The Dollar Index has recovered though and since nothing has changed fundamentally with grain, beans have fallen back as the dollar climbs higher today.

Next Thursday is the big Prospective Plantings report from the USDA. Sometimes, this report can throw a flame and spur market movement one way or another. We’ll be sitting at the edge of our seats at noon to see which way it goes. Until then, have a great weekend!

Ralph Wince
Grain Merchandiser, Canfield (Region 5)

Good afternoon, this week was the beginning of spring, but it sure has not felt like it up to this point. The grain markets have had a roller coaster ride this week, as well. Beans saw us break through the key resistance level of $12.00 a few different sessions over the last 10 days or so but were finally able to close above that $12.00 level on Wednesday and Thursday. It looks like we may close the week out below that. We will see. I have been asked by a number of customers this week why we have been seeing this rally, and if it is going to continue. My answer has been that with the Funds near a record short in the corn and beans for some time now, it would not take a lot to see them jump back into the market to buy back some of those short positions if the market would give them something.

I think this week’s rally by the specs had some concerns over a few things. First, this week was a key meeting for Fed Chairman Jerome Powell. The Fed did not raise interest rates at their meeting this week and also hinted that some rate cuts may be coming. I’m not sure that the specs have much confidence that we have inflation under control based on some of the numbers we are seeing out there. There are signs that inflation could pick up again later this year, and if that does happen, the specs like to have more of their money in commodities. Also, we have the key USDA report next week as to what the 2024 acres are going to look like. Again, as short as the specs are, I think they wanted to cover some of those shorts just in case we get a surprise next Thursday.

Fundamentally, nothing has really changed, and our exports in beans continue to lag USDA’s projection. I would encourage you all to contact your regional grain buyer and talk over your strategy as to what a realistic goal looks like for the grain you still have unpriced, as well as starting to look at targets for this upcoming 2024 crop that we are about to plant. Let’s not try for that homerun, but be looking for ways to hit those singles and that occasional double. Have great weekend!!!!

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Good afternoon. Well, wheat has been the word of the week. In the last 7 trading sessions July wheat has rallied 70¢ off the lows. This is quite a feat indeed, as the old-crop wheat spreads are making new lows.