Weekly Crop Commentary - 8/27/2021

Aug 27, 2021

Weekly Crop Commentary - 8/27/2021
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The Chicago grain markets have improved about a dime this week in corn and some twenty cents in beans. The record heat along with new crop sale announcements to China have been attributed to this week’s support. The crop ratings this week for both corn and beans did trend lower, which is pretty much normal for this time of year. Ohio continues to be one of the garden states with a good to excellent rating in excess of 80% in corn and 70% in soybeans. The bean basis continues to work lower towards new crop values, while the cash corn basis remains very strong as ethanol markets continue to search out the last carry-over bushel of 2020-21 crop year. We currently are seeing close to a two-dollar a bushel basis difference between old crop and new crop values locally. If we are to believe the latest USDA corn carry-over stocks for this year (1.117 billion bushels), one would think that every available bushel in the market would be making its way to Ohio. We soon will see combines in the field looking for the driest new crop bushels available. The next USDA report will be released in early September, and I would anticipate we will see additional adjustments to the balance sheet. The weather forecast for the coming weeks looks much better for both temps and rain chances. Both will be much appreciated for outdoor, end-of-summer activities and to add in finishing crop development. Please continue to be safe and have a great week.

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Well, here we are at the end of August, the kids are in school, we have Friday night football once again, and I am seeing the first fields of early beans start to turn.  Harvest is right around the corner, and it's always an exciting time of the year.  Corn harvest may get started here in a hurry as the domestic market for corn is red hot. How long will producers be able to hold out on getting into the cornfield?  The problem appears to be local though as the river markets and the train markets have ample supplies as harvest gains momentum in the south. Exports have also been lackluster as we have 4.1 MMT of unshipped sales on the books with 12 days remaining in the marketing year.  With the current pace of shipments, we will likely have over half of that get rolled to a new crop.  We are seeing the same thing in the soybeans as we have 2.2 MMT of unshipped sales and we haven’t shipped volumes like this since January.  The domestic market for beans is better than the export, but nothing near like the corn market is.  In fact, if we are going to hit our current crush estimate we are going to need a record crush number for August.  Not to be negative, but in the last 5 years, we have not seen an August crush number exceed July.  So, it's not looking good.  All this will just add to the ending stocks for both corn and beans.  One last piece of not-friendly news for the grain markets is that China yesterday estimated they would see a 5% reduction in hog production.  This is due to poor prices for hogs and more cases of African Swine Fever.  This decimated their herd two years ago and seems to be hanging longer than expected.  This will create an opportunity as they will be needing to import more pork to offset consumer demand.  Even though prices for grain are not as attractive as they once were, we still can lock in nice profits for the next year.  As always have a great weekend and be safe, it's going to be a warm sticky one.
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The “Dog Days of Summer” are upon us, last night there was a narrow band of rain south of Kenton giving almost two inches of rain on certain (lucky) fields. Significant rains fell in parts of MN, IA, WI, and MO yesterday.  A slight cool down will happen for us next week, but the chance of precipitation is slim with only spotty showers unless tropical storm Ida decides to take a stroll through the Ohio Valley. 

A few beans have started to change color in the area, a couple customers have said maybe in a couple weeks we could see new crop beans coming in.  

The markets were choppy this week, China did have a flash sale of beans, but export sales are still slow.   As we move closer to harvest the basis will weaken because of the anticipated bigger crop.  Everyone, have a good weekend 
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Happy last Friday of August! Even with the sluggish markets today, corn, soybeans, and wheat are all in positive territory for the week. Corn futures gaining 15+ cents, soybeans up 30+ cents, and wheat up 5+ cents since last Friday’s close.
There were some flash sale notices this week of corn sold to Mexico and Columbia, the latter being unusual. China and unknown also purchased some soybeans as well. Other than that, the export sales report on Thursday was fairly lackluster.
The upper Midwest drought areas are getting much-needed rain, but is it too late to help? Perhaps enough to keep it yields from worsening though. Meanwhile, Abnormally Dry areas are increasing across eastern Illinois, Indiana and western Ohio as bean pods are trying to fill. Be careful in the heat out there and have a great weekend!
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Delaware, OH 43015

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