Weekly Crop Commentary - 9/9/2022

Sep 09, 2022


Wes Bahan
Director of Grain Purchasing
Good afternoon. I hope you all have had a chance to enjoy the fantastic weather over the past few days. The corn market has continued to chug along since the July 22nd low. It has gained back $1.20 as I am typing this. That is real money, and we saw an uptick in sales of new crop bushels for delivery this fall.

There was a major development this week, with the confirmation of bird flu in Northwest Ohio. At this time, it is in the early stages of discovery, and it will likely continue to spread in the upcoming weeks. This will have an impact on corn usage in that area this fall. In the meantime, basis continues to be supported until new crop bushels begin flowing.

Soybeans are also working their way higher but appear to be forming a wedge on the charts. So the next few weeks will be key in determining the fate of the soybean market. Cash prices also remain supported as we are a few weeks away from any steady flow of new bushels. On Monday, the USDA will release its monthly update, and the trade anticipates some small yield reductions. I hope everyone has a great weekend, and we will be back again next week.
 
Lisa Warne
Grain Merchandiser, Mechanicsburg (Region 3)

I hope you all had a great Labor Day weekend. It has been a short week, but the market has given us some sparks to watch. December corn futures reached a high we have not seen since late June, and our cash wheat bid is back to levels we saw around harvest. The wheat strength has come from the frustrated Russian president’s statements concerning Ukraine's grain exports. Putin is accusing Ukraine of not honoring its export deal. He claims Ukraine has been only exporting to richer E.U. countries rather than the deal’s intended poorer countries in Africa. Turkey’s president has agreed that Russia’s complaints are justified.
 
Soybeans have not fared as well this week due to policies that Argentina’s government put in place on Monday. To get farmers to sell beans for export creating government revenue, they altered the peso/dollar exchange rate for soybeans from 140:1 to 200:1. The incentive has stirred Argentine farmers to sell 3.1 MMT of soybeans from Mon-Wed, which is five times more than last week.
 
Here at Mechanicsburg, we received our first 1500 bushels of new soybeans this week. Yes, there were still a few immature soybeans in there. The moisture averaged about 18.5%. While many of you are eager to start, I think we’ve still got a couple of weeks to prepare yet. Have a great weekend!

Steve Bricher
Grain Operation Manager, Urbana (Region 3)
Harvest is just around the corner. We are hearing of some corn being harvested south of here, as a local processor is making it attractive to run early with the current price premium.  

Markets are trying to find their way as we move to harvest and the economies around the world deal with the issues they all seem to have. 

Today, it feels like the farmer is in a wait-and-see mode. He is waiting to see what he has for a crop, waiting to see what prices are going to do, and waiting to see what prices are going to be in the future. I am not saying he may not be correct, but I have also seen the farmer wait and see much lower prices.  

This crop cost a lot to produce this year, and we still have good prices for it today. Let us not wait and see ourselves into marketing decisions that leave us unhappy.

Ralph Wince
Grain Merchandiser, Canfield (Region 5)
Good afternoon. Fall is upon us. Where did the summer go? Monday at noon will bring another update from USDA. Most think that the corn crop continues to get smaller - we will wait and see what USDA has to say. Today, the market is running stronger for a couple of reasons. Wheat is leading the charge as we continue to hear President Putin looking for a reason to throw a wrench into the shipments of grain flowing out of the Black Sea region. He is claiming that Ukraine is breaking some of the agreed-upon rules as to what countries would be able to receive their grain. The agreement stated only the poorest countries could receive the grain coming from Ukraine. Putin claims Ukraine is shipping to other countries. The bottom line is that he is not happy about any grain flowing out of Ukraine because it continues to help their country generate money for the war effort.
 
We will continue to watch what China does from the buying side as we move closer to the start of harvest. It appears that China needs to come to the table for both beans and corn as we get into the harvest season. One never knows for sure what China’s needs are going to be. However, based on our knowledge, it looks like they will need some more grain. If that is the case, we should see Gulf basis start to strengthen as we move ahead.
 
The addition of Witmer's Feed & Grain facility will continue to help us. We will need more corn coming into those locations as we continue to grow, which will help the local basis level. I personally want to welcome those part of the rich tradition that Witmer's has offered - both the customers as well as the employees. It’s a pleasure working with each of you, and I look forward to continuing to meet and chat with you all. Please feel free to reach out to me at any point. I want to do my best to work with all of you. Have a great weekend, and we will talk to you again next week.

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