Weekly Crop Commentary - 1/27/2023

Wes Bahan
Vice President, Grain Division
Good afternoon. There were no big reports released this week, so it was another week of being stuck in this range for the grain markets. We have seen an uptick in export sales for corn the last couple weeks, and we got confirmation of another reportable sale earlier this week that will be on the next report. Seasonally, we are in the 65% of expected sales on the books, but this year we continue to struggle. With only 50% of the expected sales of corn on the books, we need to see sales pick up fast. The Department of Energy releases information weekly on production and stocks. In this week’s report we see ethanol production slowing and stock growing. Plants in the West have been struggling with negative margins and maybe now are starting to slow grind as grain movement starts to slow. The same department also this week pledged another $118 million to biofuel projects. This takes the total to over $500 million spent on biofuel projects from the energy department in the last two years. Even though we feel that the price of soybeans is high, we don’t seem to be rationing any demand. There were reportable sales two times this week in the export market and crush margins continue to be good. Those that use soybeans are still making money, and not rationing any demand. Basis feels weak for the immediate future as Brazil is starting to hit the export market and processors continue to have ample coverage for now. We will see what next week brings as the month comes to an end.

Lou Baughman
Grain Merchandiser, Kenton (Region 1)
A choppy market today with some profit taking action after the good run this week. Exports were good in yesterday’s report, but we need to continue to compete with South America to see sales and shipments. Increase in demand will further tighten ending stocks and create rallies. South America weather continues to be favorable and US drought areas are improving. Does this mean we will have a wet spring? We will have to wait and see.

Will Gase Grain
Merchandiser, Upper Sandusky (Region 2)
We ended this week up across the board as compared to last Friday. Presently speaking, we are up 7 cents for corn, 12 cents for beans, and 10 cents for wheat. This week started with a dip in the market as Brazil and Argentina both received rains from over the weekend increasing their moisture. Markets rebounded in a big way later in the week, eliminating the losses endured on Monday. Everyone is saying this Brazil bean crop is top of the line and it will be interesting to see as we wait for some of the harvest numbers reports in the coming weeks. Couple Brazil’s great bean crop with Argentina’s drought-stricken bean crop and we might be looking at a net zero in terms of numbers between the two countries, but as always, time will surely tell.
 
Locally, Upper Sandusky new crop numbers are very similar to last week. New crop wheat is up to $7.08 so it wouldn’t be a bad idea to start thinking about throwing some fixed price contracts or target orders in. Last year felt like an anomaly, but I still feel like anything over $7.00 is a pretty good price relative to the past for wheat.
 
Target orders for beans and corn are also never a bad idea. Give us a call and we can talk through your options. Hope everyone has a great weekend!

Steve Bricher
Grain Operation Manager, Urbana (Region 3)

We can almost see the end of January already. One of the recent comments from StoneX was there would be areas of the Midwest planting in less than 80 days, so spring is not that far away.

The corn and soybean markets have recovered from some of their early week losses as we saw good export numbers and better economic numbers this week. Farmer movement has been slow with the weather, but we are seeing selling of old crop corn and soybeans as we get back to 6.50 to 6.60 corn and beans around the 15.00 level.

I think we are going to see the markets grind forward as there is not much news to make them go up or down. Today we are seeing better logistics for grain movement around the world and in the US, so just-in-time deliveries are not out of the question.

The biggest question asked over the last several weeks is where new crop prices go. We have a long way to go but history tells me we will get a chance to sell new crop at price levels that will make us money. The first round of crop insurance values starts getting set as the government uses the average price for February as its spring number.

Lisa Warne
Grain Merchandiser, marysville (Region 4)
Beneficial rains in Argentina caused grains and soybeans especially, to sell off since the highs about nine days ago. Early in the week soybeans tested a two-week low but have since recovered. All three major commodities have actually gained about a nickel on the nearby cash bids since last Friday. The recovery midweek was probably helped by USDA Flash Sale announcements on four of five days this week. While we were told not to expect much out of China this week for the Lunar New Year, we did see them buy some beans on Thursday, 3.9 million bushels, for the 23/24 crop year.  
 
India is seeing record-high wheat prices after some supply issues, even after shutting down exports last year. This has given the U.S. wheat a reason to come off its lows set Monday with some bargain buying. However, wheat is still rangebound in a pattern set about two months ago.
 
Next week’s weather looks to keep your driveways and barn lots frozen if you’re looking for an opportunity to haul grain without making too much of a mess. The end of the 10-day forecasts is showing some warmer days and rain, bringing the dreaded mud. Hope to see you across the scale next week! Have a great weekend.