I hope you’re having a great week. Our week has been a good one so far. We celebrated our son’s 20th birthday, which is so hard to believe…wow, time sure does fly. As we were all together, much of the conversation revolved around the weather, as usual. Given how cool it is this week, grain-fill on corn should be solid. While not all of our corn is in grain-fill, a good chunk of it is, so the 75-80 degree highs is tough to beat. Our beans again are in good shape, like I’ve talked about previously. It’s tough to say they’re ‘made’ just yet, but I feel good about our prospects. With much of the corn-belt warming up again soon, I’m sure moisture will be a necessity for those areas that are still dry. Please keep me posted if at all possible. I appreciate the feedback. firstname.lastname@example.org
The corn and bean markets were heading in different directions on Wednesday. While talks of a big corn crop are still prevalent, the fact a large chunk of Iowa has been short-changed on precipitation has grown into more of a discussion. Many feel if Iowa can’t catch a rain in the next week or so, it could mitigate a large crop in other states. For beans, the crop seems to grow a bit every day, and in the absence of huge bean sales every day, it could be tough to get a rally going. Outside markets should were supportive as September crude oil settled up 49 cents at $42.19. This was $1.33 off the high and 62 cents off the low. The DOW was up 338 points at 27,055. The Dollar continued to get smoked, settling down .528, closing at 92.850
Corn – The corn market hasn’t seen the light of day lately but managed to show nice gains here at mid-week. September corn closed 2 ¾ cents higher at $3.11. This was a quarter-penny off the high and 2 cents off the low of the day. The EIA report from the Department of Energy showed corn usage for ethanol off from a week ago at 93.5 million bushels of corn usage…down 2.5 mb from last week. This corn market is stuck…in no-man’s land. Being this far below the insurance price, even huge yields don’t look that great with these prices. I would strongly urge any producer to look closely at how their break-even levels are impacted by their updated yields. IF you’re looking at 20 bu/acre better corn than you were planning on this spring, plug that in and see how big of a deal it is. It’s a huge deal…and shouldn’t be discounted. My gut tells me we break until we’ve really digested how big the USDA corn yield is. Maybe it’s 180…maybe it’s 182. Regardless, the trade is unlikely to rally on this August report. I do think the low we set in the next month will be lower than the October average though…as I fully expect an ‘insurance rally’ to take place as we’ve seen many years of late. Have a plan and stick to it and let us know if you need help.
Soybeans – Soybeans are struggling to get any traction and Wednesday was more of the same. August beans settled a penny and three-quarters lower at $8.82. The close was 2 cents off both the high and low of the day. The bean market likely would have held much better given all the big export sales in the last month…but the growing crop is keeping that fire put out. With a forecast that isn’t all that threatening, it’s tough to think this bean market would rally…but at the same time, we see it holding it’s ground fairly well. Demand…it’s a big deal for sure. But, in the grand scheme of things, it would take copious demand to counter-act what many think is the biggest US bean yield ever. Given all this, I sold another 30% of my beans for a first half of Sep delivery as the bid was a good one. It would be the equivalent of $9+ SX as the push for first half was 19 cents. I feel confident thinking those beans will cut by the 15th of September given the beans I sold were planted April 6th and 7th. My plan is to re-own all of my bean sales. If you look, there is very little carry in the bean market…so buying a call spread in the March, May or July can give a producer the chance to participate in the event this market takes off an rallies. As with corn…have a plan. Base it on your operation’s costs and make your decisions based on profitability and return-on-investment.
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/ 800-4AG-MRKT
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