Corn • Soybeans • Wheat
This week saw a pull back from the recent highs made in the grain complex. The short week was focused primarily on the WASDE report released Friday and had been building the expectation. Exports continue to provide positive news across corn and soybeans as China continues to stay on pace with purchasing agreement.
Corn
The September WASDE was released this Friday and despite an immediate increase in prices the market eventually closed down for the day, and ending the week in the negative as well. The report showed a decrease in expected yield, dropping from 180.7 to now sitting at 178.5. There was also a slight change in planted acres, but the net change for the ending stocks pegged the US at 1.567 billion bu. Keep on eye on European demand as they are harvesting what is expected to be one of their smallest crops in recent history. In NY we are seeing a much better growing season, which had pushed the expected yield up 15.7, largest adjustment year over year, now sitting at 162.
Farmer takeaway:
· NY crop is looking good, be prepared for harvest logistical needs
· Keep overhead price targets working
Soybeans
The USDA did not do any favors for soybean bulls as the projection confirmed what the Pro-Farmer crop tour showed, a slight increase in yield. The forecast now has the national yield sitting at 52.8, with NY seeing the 3rd largest year over year rebound. There were also adjustments made in both planted acres as well as expected harvested acres, pushing the balance sheet to a larger ending stock number at 310 million bushels. Flash sales to China keep the pace for the Asian powerhouse to meet current year obligations. Faced with a key reversal, posting a new high and then closing lower than previous day, could signal a shift in hedge fund mentality.
Farmer takeaway:
· Watch for quality as harvest nears and white mold seems to be creeping into areas of NY
· As bins fill, make sure you have a plan and forward sales in place for logistical needs
Wheat
A relatively quiet week in the Black Sea region led to wheat posting losses for the 2nd consecutive week. USDA left the domestic balance sheet unchanged on the September report, except raising the received by farm category. On the world stage this report saw Russian and Ukrainian wheat exports trimmed by a combined 4 million metric ton, caused solely by the ongoing shipping constraints.
Farmer takeaway:
· Monitor quality in the bin, and set pricing targets to lock in profits
· Set a logistical plan for bin movement and grain flow needs
What We’re Watching Next
· Trump & Xi Summit in DC end of September
· Russia & Ukraine peace corridor for grain shipping in on/off negotiations
· Weekly Export report
Marketing Thought
Markets have been posting new highs consistently until this past week, solely on the backs of hedge funds. Funds were holding a record long position leading up to the Friday report which then saw liquidation upon confirmation of expectations. The old adage of “Buy the rumor, sell the fact” is well in play as up until Pro-Farmer and USDA published reports, rumors drove markets to new highs, and once confirmation is in place, we have seen pull back. Making incremental sales to lock in a profit is never a bad idea, especially with ever increasing input costs.
Contact our grain team to discuss cash bids, basis opportunities, contracting alternatives, and post-harvest marketing strategies.
Futures and basis are subject to change. This update is for informational purposes only and is not a recommendation to buy or sell futures or cash grain.
