Weekly Crop Commentary - 8/18/2023
Aug 18, 2023
Director of Grain Purchasing
Happy Friday everyone! I can’t believe it’s back to school time for the kiddos. Where has the summer gone? Outside markets are continuing to see losses due to lingering concerns on inflation allowing money flow to make its way into commodities. This week’s strength helped to pull corn up off its recent lows and push beans back above their 20-day moving average. Mexico purchased 112,000 MMT new crop corn, but other than that, the weather premium from the current 10-day hot/dry forecast, headline risk from Russia/Ukraine conflict, and anticipation of next week’s Pro Farmer Crop Tour appears to be what’s driving the markets right now.
Locally, we’re seeing basis fade as we approach new crop. I encourage you to reach out to your local Heritage merchandiser over the next couple of weeks to touch-base on your grain marketing plans, so we can help you achieve your goals once you get busy in the fields. Harvest will be here before we know it!Don’t forget to download our NEW Heritage Portal app to check harvest hours, e-sign contracts, and more. The Bushel app will no longer be available as of 9/30/23. Hope you all have a great weekend!
Grain Operation Manager, Urbana (Region 3)
High school football starts this weekend so fall cannot be far behind. The weather so far in August has been great but it looks like for the next week or so we are going to see some heat and dry weather. The Urbana area has had good rains so far this month and we are looking great.
The markets for corn and soybean markets have been quiet for the most part the last week. I think we are waiting on some conformation of how big the crop is out here today. Pro Farmer starts their annual trek across the Midwest on Monday so we will see yield reports as the move from east to west and west to east.
Demand for corn and soybeans has been ok here in the U.S. but exports are still not good to say the least. It is going to very hard to see this market rally over the next 6 months without an increase in export demand. If the last government report is close and we are looking at 2.2 billion bushel carryover for next year, I see corn prices in the $4 to $5 range. I don’t know why corn would need to do much more than that with that kind of carryover. The two wild cards will be what do we grow in South America this winter and does China come back to us for grain. China is seeing some economic problems, so there is fear or reduced demand there.Repeat from the last 3 weeks, old crop grain needs to be sold. The only thing that is going to happen over the next 45 days the basis is going to work against you. We are around a 1.00 a bushel difference between old and new crop at this point and it is not going to get any better. The consumers of corn and soybeans don’t want anything in their bins when new crop harvest starts, why would you want to carry old crop to new crop at a dollar more a bushel?
Grain Merchandiser, Marysville (Region 4)
We’re ending the week on a positive note as corn, soybeans, and wheat are all in the green this afternoon. Unfortunately, Dec corn and Sept wheat futures hit lows this week before turning back around. Hot and dry forecast in the western corn belt is the latest headline giving grains support. Next week is the Pro Farmer crop tour. I’m looking forward to seeing the results of scouts actually in the field and not just hearing about drive-by visuals.In the weekly crop conditions report, Ohio has the best ratings in the Midwest. Our corn is rated 76% Good/Excellent, which is 17 points better than our five-year average. The US aggregate is rated at 59%, 4 points below average. For soybeans, Ohio is tied with Illinois for the best rating in the Midwest at 70% G/E. For Ohio, that’s 12 points better than average and 4 points better for Illinois. Several customers I’ve talked with mention this could be their best corn crop yet. Many agree, we'd better have our grain dryers ready to go, though. Customers seem to have mixed thoughts on potential yields for local soybeans, but good weather the next few weeks will help determine that. Have a great weekend and enjoy some ice cream tomorrow on National Soft Ice Cream Day!