Weekly Crop Commentary - 11/22/2024

Wes Bahan
Vice President, Grain Division

The grain markets continued their wild ride again this week. Soybean futures are once again testing lows on weaker crushing margins and lack of export demand. We continue to see flashes from the USDA, but we are well off the pace we need to be to hit current export estimates and our shipping window is closing rapidly. Brazil has increased their planted acreage and they seem to have favorable weather conditions. They are priced much cheaper as we move forward into the February and beyond time slots.

There are also political concerns circling the markets. The dollar has been on a tare since the presidential election, causing our commodities to be that much more expensive in the world markets. On the other hand, demand for corn has been strong. The ethanol producers have really increased their basis levels in the last couple of weeks. The early end to harvest and the lower yields have left a void they need to fill to make it until January. We have had some nice opportunities to get some sales on the books at profitable levels since harvest has wrapped up. No one knows exactly where this market will go, but it is much better now than it was just a month ago. Have goals set and target orders in place so that if the market does provide, you don’t miss out. Thanks, and have a Happy Thanksgiving.

Haylee VanScoy
Director of Grain Purchasing

Despite this week’s bullish headlines around export flash bean sales to China and Russian missile strikes in Ukraine, that a year or two ago would cause this market to soar, grain markets struggle to finish the week in the green. What’s the difference? We have a higher US dollar that is making us less competitive on the world market, a larger US and global supply, and a South American crop that has not had any major concerns to date. SF25 futures tested 3 month lows this week and have lost nearly 30c on the week, while CZ24 corn continues to trade in a tight range between the 20 and 200 day moving averages close that that $4.30 mark.

Will the hopes of basis appreciation pay your DP charges if we don’t see the board rally into the new year? Let’s be proactive on both old crop and new crop bushels and have a plan in place to help you execute your goals. Now is a great time to explore alternative contracts, such as accumulators or flex floors that allow you to start pricing bushels for next year at levels higher than the current market. Reach out to your grain merchandiser to learn more! Hope you all have a wonderful Thanksgiving next week! Stay warm, and go Bucks!

Lou Baughman
Grain Merchandiser, Kenton (Region 1)

The holidays are upon us but let’s not put the markets on the back burner. Corn has gained better than fifty cents since harvest. Beans have not faired as well. As we look ahead December options expire today, markets will be closed for Thanksgiving on the 28th, and December futures First Notice Day is the 29th. If you have contracts needing priced under the Dec please do so. Happy Thanksgiving.

Briana Holtzman
Grain Merchandiser, Upper Sandusky (Region 2)

Happy Friday! Both the snow and the markets fell yesterday. The dollar was strong all week, not leaving much room for a bump in commodity prices. Stock futures also trended higher mid-week, with funds moving out of the commodity sector and into the stock market.

China met with Brazil this week to discuss agricultural agreements, with China leaning towards being more reliant on Brazilian commodities. This would allow China to scale back its dependency on the US, which it seems they have already started to do.

President Biden gave the okay for Ukraine to use US missiles against Russia. Wheat saw some support as these missiles were launched. A bit of risk premium was added to wheat prices this week among these tensions, but ran out as there had been few new developments in the conflict. This premium could build back up if ships become unwilling to travel through the Black Sea. Right now, this risk is still low, which is why we aren’t seeing that high risk premium in wheat.

Steve Bricher
Grain Operation Manager, Urbana (Region 3)

Winter showed up this week with our first snowfall. I am not near as excited about snow now as when I was a kid. The motorcycle rider in me does not like it at all. We are a week away from Thanksgiving and about a month until Christmas. If you need my wish list send me an email and I will be glad to forward it to you.

Corn has had a really good run since the end of harvest. As harvest has finished up around the country, we have seen the basis and board move higher. Now the question is how much more can it go? We have yet to push March futures back through the highs that we saw in early October. My general thought today is we have a good supply of corn around the country and the South American crop is progressing without any issues to this point. China is a non-player in the corn market today. The ethanol users seem to have good margin today, so they are grinding at a record pace. With all of the above I don’t know why the markets have to move much higher. Yes we can and will see basis pushes to get the farmer to open his bin when they need corn but then they will disappear again. We are still looking at a 1.8 to 2.0 billion bushels carryover, so the chance of running out is slim today. I am a believer that any kind of rally on old crop grain needs to be sold. If you have grain on DP, you have more than recovered your storage cost so far but I question if you will from here forward.

The soybean market is struggling. It has the same problem as the corn market but has no export demand. Yes, we have made a few sales, but China will be going south in 60 days to get any soybeans they may need leaving us setting on the sideline. The carryout is expected to grow from last year. Again, like corn, any kind of rally needs to be sold.

Lisa Warne
Grain Merchandiser, Marysville (Region 4)

I was not ready for that snow this week! We need precipitation, but winter mud and grime season is my least favorite. The corn market seems to have found a range it’s comfortable with. The Dec futures only had a 10-cent trading range this week and basis improved three cents to close the week. Soybeans and wheat had a wider range, with beans looking to end the week down about 17 cents and wheat for next July up about 13 cents on the week.

With the US Dollar making fresh 2-year highs today, I’m somewhat impressed grains held as well as they did today. There’s not much bullish data these days, so with every global conflict and political headline, it gives funds something to trade against. I’ve heard talk of sub-$9 beans if a new trade dispute happens with China once the new administration takes over. So if we do get back to $10 cash beans, I’d be a seller. As I said before with corn, it seems pretty rangebound for now until something breaks the barrier. Have a great Thanksgiving with your family and friends, and go Buckeyes!