Good Morning!
I hope everything is going ok for you and yours. We have been hard at it this week…mostly trying to find dry corn or beans. With plenty of replant in both, it’s been a struggle to harvest whole fields, but it’s getting to the point where we are getting some of the replant out of where we started harvesting a couple of weeks ago. We hand-shelled some of the corn planted June 1st…109 and 110-day corn. It was running 23-25%, so it’s likely a point or two wetter. The corn we’ve been in has been soso, with lack of nitrogen showing up as we assumed. While we added some N on a side-dress this year, we simply lost too much with three 5-inch rains. Our beans have been ok but see water damage there as well. I’d say our beans are 15 off of last year on average while corn is more like 40-50 off 2018. Keep sending yields if possible. I appreciate the info. matt@AgMarket.Net
The corn and bean markets didn’t set the world on fire on Wednesday as we continue to learn more about the trade deal or lack there-of. With the Chinese insisting tariffs be removed if they are to purchase the 40-50 billion worth of agricultural goods President Trump has indicated, it seems the ‘agreement’ may have been premature. We also have a confusing report from the EPA on the RFS, which doesn’t really jive with what President Trump indicated we’d be seeing. It’s tough to know exactly what to believe anymore, but the market looks quite skeptical nonetheless. As far as the outside markets are concerned, some support should have been lent, as the Dollar index was down on the day while crude was a shade higher. November crude oil was up 16 cents at $52.97. This was 77 cents off the high and 46 off the low of the day.
Corn – The corn market was steady to lower on the overnight and continued that feel for most of the day session. December corn ended the day at $3.91 ¾, down a penny and a half. This was a penny off the high and 4 ¼ cents off the low. There were no ethanol numbers from the EIA just yet as we are a day behind due to Columbus Day. With export inspections disappointing on Tuesday and harvest at just 22% versus the five-year-average at 36%, no real direction was given by this week’s reports from the USDA. For me, it’s interesting how strong corn basis remains as harvest rolls on. Generally, we’ll see basis back off…but that hasn’t been the case in most places as end-users seem a bit concerned about originating the bushels they need. I have to think we’ve lost bushels from the freeze event this past weekend, so it will remain to be seen just how that affects US yield and carry-out estimates. I will continue to argue the USDA is low on their ‘feed & residual usage’ category all year, so you may as well get used to hearing it now. I knew they were low last marketing year…but hesitated to question them…not so this time around. Corn carry could be very interesting during this marketing year. While I think ownership of corn is smart, I’m also going to reward the market with these strong basis levels…then re-own with an at-the-money call.
Soybeans – Soybeans closed lower on the day with buyers on the sidelines. November beans ended day down 6 cents at $9.28. The close was 10 ¾ cents off the high and a half-penny off the low. The bean market has been solid of late but struggling this week with a lack of bullish news present. Export inspection on Tuesday weren’t anything too exciting at less than a million metric tons. On the crop progress report, soybean harvest was 26% versus the five-year average of 49%, so we are still running way behind normal. With plenty of speculation about how much soybean production will be affected by the freeze and snow event last weekend, it makes this bean deal interesting. Given carry is now under 500 million bushels, there’s no question any further adjustments lower will be closely watched. I feel like the USDA needed to adjust this bean yield lower before last weekend, but no one really knows where we will end on 2019 yields. While I like storing beans this year with a 44-cent carry, some of these basis levels are making a guy think twice. If you sell those beans across the scale, I would sure consider buying a call to see what happens with bean prices in the next month or two. While we’ve already had a solid bean rally, IF the funds choose to go long, we could see more up.
Call me if you want to talk positions or strategy. 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
Back