Good Morning!
I hope your week has been a good one so far. Ours has been wet…shockingly. Heck, we hadn’t had meaningful rain in a long time, but had over two inches on Tuesday night. We’re up to three inches on the week, and harvest is certainly slowed a bit due to this moisture. While I’m fortunate to be done with our own crops, if one of our neighbors needs help, I’m sure we’d be glad to do so. Otherwise, we’ll let this moisture soak in and get back to rippin some these tight soils. The heavy rains from this growing season early on showed up as we harvested, both from some bare spots and due to how much the yield dipped. With all this said, I’m hopeful everyone can get done with harvest without too much more rain. We are happy with some rain as dry as what it had been getting. I highly doubt we’ll know it rained much in a day or two…it will soak in quickly. Please keep us posted…we’d appreciate hearing how you’re getting along. matt@agmarket.net
The corn and bean markets continued their impressive run on Wednesday. With both corn and beans posting solid gains, the rally seems firmly in place for now. The funds continue to buy and with the interest in corn of late, we see strong markets for all three of the big ag commodities. There’s plenty of talk about South America getting some rain but even more about them getting a late start. The first crop coming in late should keep the US active in the world export market…but will also get the second crop (think safrinha corn) planted later than desired. With this La Nina fairly strong, it’s definitely made its mark on world weather…and may for some time. Outside markets were likely mixed in contribution. With crude dropping $1.67, Dec closed at $40.03 on the day. This was $1.56 off the high and 25 cents off the low. The Dollar settled .452 lower on the day at $93.599. The DOW wasn’t doing much and settled slightly lower, with a close at 28,134, down 48 points on the day.
Corn – The corn market continues to race higher with solid gains posted once again on Wednesday. December corn closed up a nickel at $4.13 ¾. This was a penny and a half off the high and 6 cents off the low of the day. The EIA report from the Department of Energy showed corn usage for ethanol off a bit at just under 91 million bushels on the week. Demand remains solid for ethanol which is quite important considering demand otherwise is stout as can be. Exports have been nothing short of phenomenal to this point in the marketing year, with Chinese business obviously contributing heavily. I know many of you don’t want to ‘re-own’ at the high…I certainly understand that thought. However, many have re-owned at what they thought the high was for the last few weeks. The bottom line is this…if you want to retain ownership, do so in a smart fashion without risking too much. July call spreads with a wide window have performed well. The basis levels have remained strong while spreads and carry has evaporated…the market wants the corn now. With that being said, it’s a bull market…therefore, why me and my team like selling corn and keeping ownership. It’s good business locking in net income with a chance for more if the market continues on this run. Last thing on corn…and along the lines of profitability is to keep a close eye on Dec21…which traded over $4 on Wednesday. Given bargain fertilizer prices, it makes good sense to get started somewhere in here.
Soybeans – Soybeans had another good day, continuing a strong run for the week. November beans settled up 8 cents at $10.72. The close was a nickel off the high and 7 ¾ cents off the low of the day. The bean market hasn’t been as ‘on fire’ as it was, but these nice, steady gains are tough to beat as well. With plenty of concern about world weather, particularly in South America, the US is looked to as the place to go for soybeans. Many continue to question if the USDA will tinker with bean yields from here given how dry the end to the growing season was. Plenty of chatter around the market has centered around yields that dropped off for many on later-planted beans. As one could assume, the early-planted beans again were better yielding in many environments here in 2020. Keep an eye on Nov21 as we got within 15 cents of $10…it would be smart to start selling a little bit given the profitability we can lock in.
Call us if you want to talk positions or strategy…or simply bend our ear. If you want more information on the markets, be sure to visit my team’s website at https://www.agmarket.net/
Matt Bennett
217-273-1133 – Work
@chief321 – Twitter
matt@bennettconsulting.net – E-mail
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