Good Morning!
I hope things have been running smooth for you around your place. Unfortunately, I know many of you are sitting still after copious rainfall over the last few days. In my part of the world, we didn’t get much rain, so we got super-lucky. We have cut beans here and there, but it’s slow-going so far. With replanted beans in most fields and beans not maturing evenly, we are having to pick and choose our spots. Yields are still decent but well under last year. In fact, most in our area are talking about yields 20-30% under those big yields from a year ago. Those who are sharing yields seem to be sharing similar stories on beans, but corn yields seem to be hanging in there for the most part. Yes, I expect them to move lower in October’s crop report, but by percentage, maybe not as much as the beans. Please keep me posted on yields…it’s much appreciated. mbennett@AgMarket.Net
The corn and bean markets both had an awesome day! When is the last time we could say that? Going into the quarterly stocks report, the bean market was up 12-15 cents, while corn was trading a penny or two higher. When the report hit, both corn and beans put together nice days with solid closes. The corn report was certainly bullish…no questions asked. With the corn ending stocks pegged at 2.114 billion bushels, we were over 300 mb below the average trade guess of 2.428 bbu, while the lowest trade estimate was 2.298 bbu. Bullish is all a person can take from this report for corn. Beans were friendly as well with the stocks pegged at 913 mbu, which was below the average trade guess of 982 mbu. The lowest trade estimate was 940 mbu, so the bean report was solid as well. If you look back I’ve been calling for this report to potentially stabilize us. Given these cuts in supply will have to translate to supply and demand balance sheets, we could see solid support going into the glut of harvest. Outside markets were negative as the Dollar was strong while crude got beat up. November crude settled down $1.55 at $54.36. This was $2.20 off the high and 39 cents off the low.
Corn – On Sunday night, the corn market was up for the most part, but quiet as compared to the day session. The bullish report propelled December corn to settle up 16 ½ cents at $3.88. This was a quarter-penny off the high and 16 ½ cents off the low. Weekly export inspections were up on the week by over 150k metric tons from a week ago with 399k mt of exports posted. The good to excellent ratings on corn have pretty much run their course…but stayed at 57% good/excellent. Only 43% of the crop is mature, compared with 73% last year. Harvest was pegged at 11% versus the 5-year-average or 19%. This report though was what turned the tide. Keep in mind, the 300 million bushels below the trade guess will translate to the supply and demand balance sheet. This makes it imperative that total production doesn’t drop on the October 10th report. If we see yield and/or harvested acreage drop, we are likely to see more of a price reaction to ration demand…as stocks to usage ratio will tighten further. I remain patient on this corn market…but look for opportunities to lock in profit margins if this rally gets some legs.
Soybeans – Soybeans on Sunday night were up, but as with corn, the day session provided the real fireworks. By the end of the day, November beans closed 23 cents higher, settling at $9.06. This was three-quarters of a penny off the high and 22 ¼ cents off the low. Weekly export inspections were up from last week…by 60k metric tons at 982k mt. Ratings for beans were up 1% on the week, moving to 55% good/excellent. There are still only 55% of the beans are dropping leaves versus 76% for a five-year average. Soybean harvest was pegged at just 1% versus 8% for the 5-year-average. The bean report as well was quite friendly, but in the grand scheme, nothing like the corn report. With that being said, the bean carry could get very tight given the cut in stocks. Also, the yields we continue to hear have been disappointing as compared to expectations. What we’ve been talking about all year is coming to pass now…and IF we see USDA drop yields by two or three bushels like we feel is quite possible, US bean carry could provide serious sparks for a market that sorely needs it.
Let me know if you’d like to discuss any strategies. Have a great week!
Matt Bennett
217-273-1133 – Work
@chief321 – Twitter
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