Corn • Soybeans • Wheat
Justin N
Major news this week comes from the recent BRICS conference in India as Chinese President Xi collapsed and reported suffered a stroke, putting the balance of the CCP on the line. During this same time it is reported the Chinese military released 2 of Xi’s political adversary’s who are less friendly towards the agricultural community and are more for hardline totalitarian control.
Corn
Now one week out from the last WASDE report, we see the market starting to digest the volume that has started coming out of fields in the south. USDA reported earlier this week some states, including North Carolina and Texas, are now over 50% completed with their corn. Hedge funds are still near their record long position being held, which converted to a percentage is the equivalent of the funds owning over 10% of the US crop on paper. There is still plenty of time left for the NY crop to reach it’s finish line, but thanks to mother nature mostly cooperating this growing season it is currently forecasted that NY yields will come in around an average of 162.
Farmer takeaway:
· Prices are sitting near the upper echelon of recent history, look for opportunity to lock in profit
· Be ready for harvest space needs, set up homes for bushels sooner rather than later
Soybeans
The big news this week on the soybean front came mid-week as President Xi of China reportedly collapsed after suffering a stroke at the latest BRICS conference. Xi comes from a farming family in China and has a soft spot for agriculture, which has been the underlaying reason for his using ag goods as negotiating pieces. Should he be forced out of office the growing concern is the new leader may not honor previous agreements and could jeopardize US soybean exports. Domestic usage is projected to be a record high for the year which will provide an area of support, but exports are greatly needed to keep the market rallying. Locally it looks like we are starting to get closer towards harvest, as fields have begun to show a change in their maturity. All things considered, the soybean market managed to gain .07 this week, but has consistently traded down since the Xi news broke.
Farmer takeaway:
· Watch for news headlines to drive market in coming weeks
· Set pricing targets to lock in any further rallies
Wheat
Wheat has experienced some recent consolidation after strong bull runs earlier this year. Global supply concerns, Black Sea export uncertainty, and lower export availability from major wheat-producing regions helped fuel the advance. However, profit-taking from hedge funds and improving export competition have recently pressured prices. Wheat ended the week closing down .16 from the open Monday morning.
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 Thoughts
Harvest will be here and in full swing before you know it, make sure to have plans in place. Headlines and global instability will be a big driver moving forward as we settle into a new crop balance sheet. Yield updates and crop quality will be at forefront domestically as combines roll across the mid-west. As we see inputs continue to rise, sitting down and getting as close to mark as possible for a cost of production will be essential for this year and the coming years to ensure profitability.
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.
