Weekly Crop Commentary - 8/12/2022

Aug 12, 2022

Ed Nienaber
Vice President, Grain Division
The grain future prices have traded stronger this week, with corn up twenty cents and beans up thirty cents prior to today’s USDA crop report. The cash basis continues to erode on both commodities as the market continues to bridge the gap between old and new crop values. Local demand is hand mouth, and, oddly enough, our support continues to come from the river barge-export market. Weekly crop conditions on both corn and beans are rated around 60% good to excellent, keeping funds on the sidelines. Things to keep an eye on in today’s report are estimated corn and bean yields. Will we see a change in planted acreage on resurvey of the Dakotas and possible changes in global production due to weather issues in Europe? We will then begin to focus on industry crop tours that will begin in the coming days. Enjoy the beautiful weather, stay safe, and have a great week.
Wes Bahan
Director of Grain Purchasing
Ohio saw a 3% improvement in good to excellent corn ratings last week, with only Colorado having a bigger week-by-week improvement. The other states in the Great Plains continued to deteriorate by losing a combined 23 percentage points. Kentucky, Tennessee, and North Carolina also continue to see slippage, with continued hot and dry weather. As far as soybean ratings last week, Ohio gained 2%, which coincides with the corn improvement. The Great Plains states also saw a substantial decrease losing a combined 17 percentage points. With the rains this week, we should see more improvement next week in most key producing states. Basis levels for both corn and beans continue their seasonal slide. As we draw closer to new crop harvest, this will likely continue to be the theme. If you still have grain ownership, there is still a premium from spot delivery to new crop. You will continue to risk real dollars as basis levels will continue to fade. The USDA will be updating supply and demand numbers as well as factoring in the recount on Minnesota and North Dakota planted acreage. 
Lou Baughman
Grain Merchandiser, Kenton (Region 1)

Today, USDA came out with a 1.6 bpa less than the July report of 177 bpa yield, while the beans increased by 0.5 bpa. The carryout on the beans also increased, pushing the beans down hard but quickly rebounded close to unchanged. Corn carryout dropped substantially, helping the corn market to sustain its gains as basis continues to fade for both cash corn and beans.

If you still are holding on to delayed price grain, new DP charges will begin at the end of the month. Call your local elevator to ask about options in marketing. 

Steve Bricher
Grain Operation Manager, Urbana (Region 3)
We are a couple of weeks away from high school football. The Champaign County Fair finishes up today. We can see that harvest is just around the corner.

Farmers are cleaning up and moving the last of their old crop corn, and soybeans, and it is showing in the basis. The consumer is fading their basis as they are selling the idea that they have enough inventory and deliveries to get them to new crop grain. It is always like a game of chicken to see if they can get to new crop deliveries before they run out. This is the case for the local processor, as well as the feeders in the Southeast. They are like any consumer - they don’t want to pay more than they have to for their inputs.

The inversion between old and new crop corn and soybeans is closing rapidly. At this point, if you have old crop grain unpriced, you are playing a game that I don’t think you can win in the short term. They are things you can do to capture the inversion but stay long in the futures.

Ohio Country Journal did a crop tour this week; you can visit their website www.ocj.com to see the results. From what I read, they saw what I have been saying most of the summer - this crop is running late and varies greatly around the state. Pro Farmer will do their tour the week of August 22, and we will see how the national crop looks.

I am writing this week’s article before today’s crop report, so we will see what the USDA says about where we are with this year’s crop. As always, thank you for your continued support of Heritage Cooperative.

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