Weekly Crop Commentary - 12/2/2022
Dec 02, 2022
Ed Nienaber
Vice President, Grain Division
Welcome to December! The commodity market continues to trade range bound, with corn trading roughly twenty cents lower on the week and beans unchanged. Even with the negative news from the EPA this week on revised biodiesel mandates and bean oil trading down the limit, bean futures are about unchanged on the week. Cash corn has been offset by improved basis as local buyers work to pull just-in-time bushels out of grain bins. It’s that time of year when traditionally the basis must do all the heavy lifting of grain movement. Continued concerns with China and Covid lockdowns are making the trade nervous when it comes to additional bean demand from US this year. This and lack of any real negative news concerning the Southern Hemisphere bean production is weighing on futures. On a very positive note, the rail strike has been averted by our elected officials and this is great news for all. The USDA will be rolling out final production numbers and supply/demand report on Thursday, January 12. This is considered as one of the three major market movers of the annual crop cycle. Please continue to be safe and enjoy the holiday season!
Lou Baughman
Grain Merchandiser, Kenton (Region 1)
Harvest in this area is finished with only a few stragglers to wrap up. Construction is moving along on the new grain bin, updated pictures are below. Have a good weekend.
Haylee VanScoy
Grain Merchandiser, Upper Sandusky (Region 2)
Can’t believe it’s December already! 2023 will be here before we know it. As harvest has all but wrapped up for most and groundwork completed, it’s time to evaluate our marketing plans and reflect on what went well and what we can improve upon for next year. The bean market saw a nice rally on Monday, followed by a strong reversal on Thursday taking back everything it gained. The bean oil market was limit down on Thursday due to the EPA’s release of 3 years’ worth of biodiesel mandates that were more modest than the trade was expecting. We also saw late yesterday that the Senate passed a bill to help avert the impending rail strike. The bill had already been approved by the House and will now go to the President’s desk to be signed. Locally, we continue to see basis improvement in both corn and beans this week. Don’t forget to have target offers in over the holiday season to price DP grain. Also, with new crop corn and beans still over $5.50 and $13.25 respectively, it would be worth putting a new crop offer out there as well. Have a wonderful weekend!
Steve Bricher
Grain Operation Manager, Urbana (Region 3)
Thanksgiving has passed and we are now in the “do you have your Christmas shopping done yet” mode. If you need to know what to get me, just send me a note and I will provide suggestions.
The corn market for the most part has been trending sideways. We took a bit of a hit on Thursday from the soybeans market which I will get into in a second. Basis levels in the Western Corn Belt are strong which continues to support us here in the east. If the market stays sideways, basis will have to improve to get movement out the farmer’s bins. We need to start talking about price levels that you want to get stuff moving. Remember you grew this crop to sell, not to look at it in the bin.
Soybeans took a big hit on Thursday, and we will have to see if we can rally this market.
As Arlan Suderman with FC Stone said,
“It was a perfect storm for soyoil bears. Prices failed to push successfully push through an area of resistance on the charts. Managed money held very large, long positions, with few shorts. Oil stocks are building as crushers work at a historically high pace with strong oil yields. Exports are essentially nonexistent and domestic edible oil demand is soft. Fund managers had little justification for pushing prices through chart resistance, turning them into profit takers. The final straw was an RVO package from the EPA that did little to provide additional support for soyoil demand. The Renewable Diesel industry is still growing, but not at the unrealistic pace expected by fund managers. As such, we continue to see this cycle of building big, long positions, hitting disappointment, selling off, and then starting the cycle again. We know how to build the crush industry, so that will build faster than the RD industry. We should reap more of those benefits over the coming year, helping to offset eroding export demand.”
It looks as if Congress is not going to let the railroad worker’s strike. Both the House and Senate passed a bill to prevent the strike. You can find plenty of articles about this on the internet if you want to read about it, as my 2 ½ year old grandson says, “Google it.” From my standpoint the railroads running will make our lives easier this month and through the winter.
As you are getting inputs purchased for next spring, we need to start getting offers in to get next year’s crop sold.
Lisa Warne
Grain Merchandiser, Marysville (Region 4)
Welcome to December! Soybeans are starting the month on a wild ride with the January futures hitting a 2-month high on Wednesday and then tanking 40 cents on Thursday. At the noon hour today, we’re about even with where the futures closed last week on Black Friday. With soybean production concerns in Argentina due to dryness, the optimism for exports to China helped with the rally. Then on Thursday, the EPA announced their Renewable Fuel Standards proposal for 2023-2025 and the mandates for biomass-based diesel was less than what the market had priced into the trade.
Corn futures remain sideways-to-bearish as export sales continue to fall further behind the pace needed to meet USDA projections. China and others have not stepped forward to make their typical purchases of corn so far this marketing year. Accumulative corn sales for this crop year are 48% behind last year’s pace. Many traders are expecting USDA to adjust export expectations in one of the upcoming reports. Fortunately, the local cash basis has improved over the last few weeks to help offset some of the declining futures.
I have officially made my permanent move from Mechanicsburg to Marysville. I can be reached at the MAC number: 937-553-9870 extension 471. Thank you to Mechanicsburg for 21 great years, but please know you’re still welcome to call me at MAC anytime! I’m looking forward to working with everyone at the Marysville Ag Campus. Have a great weekend!
Vice President, Grain Division
Welcome to December! The commodity market continues to trade range bound, with corn trading roughly twenty cents lower on the week and beans unchanged. Even with the negative news from the EPA this week on revised biodiesel mandates and bean oil trading down the limit, bean futures are about unchanged on the week. Cash corn has been offset by improved basis as local buyers work to pull just-in-time bushels out of grain bins. It’s that time of year when traditionally the basis must do all the heavy lifting of grain movement. Continued concerns with China and Covid lockdowns are making the trade nervous when it comes to additional bean demand from US this year. This and lack of any real negative news concerning the Southern Hemisphere bean production is weighing on futures. On a very positive note, the rail strike has been averted by our elected officials and this is great news for all. The USDA will be rolling out final production numbers and supply/demand report on Thursday, January 12. This is considered as one of the three major market movers of the annual crop cycle. Please continue to be safe and enjoy the holiday season!
Lou Baughman
Grain Merchandiser, Kenton (Region 1)
Harvest in this area is finished with only a few stragglers to wrap up. Construction is moving along on the new grain bin, updated pictures are below. Have a good weekend.
Haylee VanScoy
Grain Merchandiser, Upper Sandusky (Region 2)
Can’t believe it’s December already! 2023 will be here before we know it. As harvest has all but wrapped up for most and groundwork completed, it’s time to evaluate our marketing plans and reflect on what went well and what we can improve upon for next year. The bean market saw a nice rally on Monday, followed by a strong reversal on Thursday taking back everything it gained. The bean oil market was limit down on Thursday due to the EPA’s release of 3 years’ worth of biodiesel mandates that were more modest than the trade was expecting. We also saw late yesterday that the Senate passed a bill to help avert the impending rail strike. The bill had already been approved by the House and will now go to the President’s desk to be signed. Locally, we continue to see basis improvement in both corn and beans this week. Don’t forget to have target offers in over the holiday season to price DP grain. Also, with new crop corn and beans still over $5.50 and $13.25 respectively, it would be worth putting a new crop offer out there as well. Have a wonderful weekend!
Steve Bricher
Grain Operation Manager, Urbana (Region 3)
Thanksgiving has passed and we are now in the “do you have your Christmas shopping done yet” mode. If you need to know what to get me, just send me a note and I will provide suggestions.
The corn market for the most part has been trending sideways. We took a bit of a hit on Thursday from the soybeans market which I will get into in a second. Basis levels in the Western Corn Belt are strong which continues to support us here in the east. If the market stays sideways, basis will have to improve to get movement out the farmer’s bins. We need to start talking about price levels that you want to get stuff moving. Remember you grew this crop to sell, not to look at it in the bin.
Soybeans took a big hit on Thursday, and we will have to see if we can rally this market.
As Arlan Suderman with FC Stone said,
“It was a perfect storm for soyoil bears. Prices failed to push successfully push through an area of resistance on the charts. Managed money held very large, long positions, with few shorts. Oil stocks are building as crushers work at a historically high pace with strong oil yields. Exports are essentially nonexistent and domestic edible oil demand is soft. Fund managers had little justification for pushing prices through chart resistance, turning them into profit takers. The final straw was an RVO package from the EPA that did little to provide additional support for soyoil demand. The Renewable Diesel industry is still growing, but not at the unrealistic pace expected by fund managers. As such, we continue to see this cycle of building big, long positions, hitting disappointment, selling off, and then starting the cycle again. We know how to build the crush industry, so that will build faster than the RD industry. We should reap more of those benefits over the coming year, helping to offset eroding export demand.”
It looks as if Congress is not going to let the railroad worker’s strike. Both the House and Senate passed a bill to prevent the strike. You can find plenty of articles about this on the internet if you want to read about it, as my 2 ½ year old grandson says, “Google it.” From my standpoint the railroads running will make our lives easier this month and through the winter.
As you are getting inputs purchased for next spring, we need to start getting offers in to get next year’s crop sold.
Lisa Warne
Grain Merchandiser, Marysville (Region 4)
Welcome to December! Soybeans are starting the month on a wild ride with the January futures hitting a 2-month high on Wednesday and then tanking 40 cents on Thursday. At the noon hour today, we’re about even with where the futures closed last week on Black Friday. With soybean production concerns in Argentina due to dryness, the optimism for exports to China helped with the rally. Then on Thursday, the EPA announced their Renewable Fuel Standards proposal for 2023-2025 and the mandates for biomass-based diesel was less than what the market had priced into the trade.
Corn futures remain sideways-to-bearish as export sales continue to fall further behind the pace needed to meet USDA projections. China and others have not stepped forward to make their typical purchases of corn so far this marketing year. Accumulative corn sales for this crop year are 48% behind last year’s pace. Many traders are expecting USDA to adjust export expectations in one of the upcoming reports. Fortunately, the local cash basis has improved over the last few weeks to help offset some of the declining futures.
I have officially made my permanent move from Mechanicsburg to Marysville. I can be reached at the MAC number: 937-553-9870 extension 471. Thank you to Mechanicsburg for 21 great years, but please know you’re still welcome to call me at MAC anytime! I’m looking forward to working with everyone at the Marysville Ag Campus. Have a great weekend!