Weekly Crop Commentary - 2/17/2023
Feb 17, 2023
Ed Nienaber
Vice President, Grain Division
This week the commodity markets have been seasonably quiet with corn trading a nickel lower and beans down fifteen cents on the week. Traders have been focusing on bean harvesting in Brazil, plantings of the safrinha corn crop, and the line-up of vessels preparing to load beans for China. We did see some support in beans this week with the announcement of nearby tenders for beans to China. However, we are only bridging the gap for southern hemisphere beans to China. Corn exports continue to be disappointing and are running behind the levels needed to reach the USDA 1.925BB estimate. Nearby cash corn and bean basis is over-bought and currently trending weaker. Offers are being hit on the bid side of the market as piles are being picked up and the cost to carry grain at the current interest rate levels make it difficult to pencil storing grain. The long positions in the market are betting on spring planting issues, growing season setbacks, and the wild card “China” being a buyer of protein and feed grains as we move into the spring. Please continue to be safe and thanks for your continued support!
Wes Bahan
Vice President, Grain Division
Good afternoon, once again. The grain market rollercoaster was going full speed ahead again this week. Things started off very strong for both corn and beans touching resistance levels. Lacking any fresh fundamental news in the markets those resistance levels held firm and prices retracted as the week went on. We did see a lot of bushels come to the market when prices were higher, and most of the end users have now posted restricted hours. This caused spot basis levels for corn and beans to end the week on the defensive. We are halfway through the February crop insurance price discovery period and as of last nights close, we have December corn at 5.95 and November beans at 13.73. This is in comparison to the final numbers of 5.90 for corn and 14.32 for soybeans in last year’s February program. Looking at what the cost of nitrogen has done recently we should see a strong corn planted acreage number this spring, barring some sort of weather issue that prohibits planting.
Brazilian bean harvest last week progressed to 17% complete, compared to 24% at the same time last year. Not only has this delayed loading of bean vessels, but it is also delaying the planting of the Safrinha corn crop. It is imperative that this crop is planted in a timely manner to ensure that it is made before the dry season sets in. The delay in loading beans seems to have forced some sales of US beans as the USDA did report a sale 4.7 and 4.5 million bushels of old crop beans this week. Ship lines are not wanting to put more freight in the Brazilian pipeline until some of the backlog gets cleaned up.
Haylee VanScoy
Director of Grain Purchasing
Happy Friday! Hope you all had a wonderful Valentine’s Day this week. The markets didn’t give us an overabundance of love this week but managed to finish out the week in the green. CH23 corn is currently 8c lower than Monday’s close and SK23 beans are 14c lower. However, with old crop corn and beans still above $6.50 and $15.00 respectively, I encourage you to take some additional risk off the table and price some additional old crop bushels soon. The Argentina dryness headline has been growing stale and harvest progress in Brazil has been picking up. Reports from Mato Grosso, one of Brazil’s largest agricultural states, showed that 45% of soybeans had been harvested as of last week and 42% of their corn has been planted. We’ve also seen a couple flash export sales this week with 213,000 MT of corn sold to Mexico on Wednesday, 128,000 MT of beans to Unknown on Thursday, and 120,800 MT of corn to Unknown this morning. Tensions are mounting in Ukraine as the 1-year anniversary of the Russian invasion is coming up next Friday. Reminder that markets will be closed Sunday evening and on Monday for President’s Day and will resume trading at 8 PM Monday evening. Have a great weekend all!
Will Gase
Grain Merchandiser, Upper Sandusky (Region 2)
Since last Friday there have been multiple news-worthy events. Between the Russia/Ukraine war, China sending balloons over North America, and the East Palestine train derailment you can determine your top headline. The one I’ll pick is the Russia/Ukraine war. A week from now is the one-year anniversary of the start of the war and now many are saying Russia is gearing up for a second major offensive. Furthermore, the Black Sea grain export deal is set to expire in March and negotiations on extending it will begin next week. These two events can lead to volatility in the market, and it would be a good idea to set some target orders for remaining DP bushels or on-farm storage.
As we move towards the March report dates continue thinking about prices for the fall and where your cost of production is. Give us a call and we can walk through a marketing plan that fits your needs. Hope everyone has a great weekend and stay safe.
Steve Bricher
Grain Operation Manager, Urbana (Region 3)
Lisa Warne
Grain Merchandiser, Marysville (Region 4)
I hope you all were able to enjoy that 70 degrees we briefly saw this week! The grain markets are ending the week on a quiet note with the lack of much bullish news to stir things up. Early in the week we saw a bump higher on a lower Dollar Index, rains slowing Brazilian soybean harvest, and continued dryness in Argentina. However, harvest in Brazil did pick up midweek and the US Dollar Index turned around, putting pressure on the grain markets. US soybean exports are still above the seasonal pace, but they are starting to trend lower as more beans become available from Brazil. Corn exports, however, are falling further behind seasonal trends and the pace needed to meet USDA expectations. Corn and beans are unwilling to give up any ground to the other as we near planting season, so markets are at a bit of a stalemate.
Just a reminder that the markets are closed on Monday for Presidents’ Day, but your Heritage locations will be open. We will be offering free Delayed Price for corn and soybeans on newly delivered bushels starting Monday. Only 31 days until spring!
Vice President, Grain Division
This week the commodity markets have been seasonably quiet with corn trading a nickel lower and beans down fifteen cents on the week. Traders have been focusing on bean harvesting in Brazil, plantings of the safrinha corn crop, and the line-up of vessels preparing to load beans for China. We did see some support in beans this week with the announcement of nearby tenders for beans to China. However, we are only bridging the gap for southern hemisphere beans to China. Corn exports continue to be disappointing and are running behind the levels needed to reach the USDA 1.925BB estimate. Nearby cash corn and bean basis is over-bought and currently trending weaker. Offers are being hit on the bid side of the market as piles are being picked up and the cost to carry grain at the current interest rate levels make it difficult to pencil storing grain. The long positions in the market are betting on spring planting issues, growing season setbacks, and the wild card “China” being a buyer of protein and feed grains as we move into the spring. Please continue to be safe and thanks for your continued support!
Wes Bahan
Vice President, Grain Division
Good afternoon, once again. The grain market rollercoaster was going full speed ahead again this week. Things started off very strong for both corn and beans touching resistance levels. Lacking any fresh fundamental news in the markets those resistance levels held firm and prices retracted as the week went on. We did see a lot of bushels come to the market when prices were higher, and most of the end users have now posted restricted hours. This caused spot basis levels for corn and beans to end the week on the defensive. We are halfway through the February crop insurance price discovery period and as of last nights close, we have December corn at 5.95 and November beans at 13.73. This is in comparison to the final numbers of 5.90 for corn and 14.32 for soybeans in last year’s February program. Looking at what the cost of nitrogen has done recently we should see a strong corn planted acreage number this spring, barring some sort of weather issue that prohibits planting.
Brazilian bean harvest last week progressed to 17% complete, compared to 24% at the same time last year. Not only has this delayed loading of bean vessels, but it is also delaying the planting of the Safrinha corn crop. It is imperative that this crop is planted in a timely manner to ensure that it is made before the dry season sets in. The delay in loading beans seems to have forced some sales of US beans as the USDA did report a sale 4.7 and 4.5 million bushels of old crop beans this week. Ship lines are not wanting to put more freight in the Brazilian pipeline until some of the backlog gets cleaned up.
Haylee VanScoy
Director of Grain Purchasing
Happy Friday! Hope you all had a wonderful Valentine’s Day this week. The markets didn’t give us an overabundance of love this week but managed to finish out the week in the green. CH23 corn is currently 8c lower than Monday’s close and SK23 beans are 14c lower. However, with old crop corn and beans still above $6.50 and $15.00 respectively, I encourage you to take some additional risk off the table and price some additional old crop bushels soon. The Argentina dryness headline has been growing stale and harvest progress in Brazil has been picking up. Reports from Mato Grosso, one of Brazil’s largest agricultural states, showed that 45% of soybeans had been harvested as of last week and 42% of their corn has been planted. We’ve also seen a couple flash export sales this week with 213,000 MT of corn sold to Mexico on Wednesday, 128,000 MT of beans to Unknown on Thursday, and 120,800 MT of corn to Unknown this morning. Tensions are mounting in Ukraine as the 1-year anniversary of the Russian invasion is coming up next Friday. Reminder that markets will be closed Sunday evening and on Monday for President’s Day and will resume trading at 8 PM Monday evening. Have a great weekend all!
Will Gase
Grain Merchandiser, Upper Sandusky (Region 2)
Since last Friday there have been multiple news-worthy events. Between the Russia/Ukraine war, China sending balloons over North America, and the East Palestine train derailment you can determine your top headline. The one I’ll pick is the Russia/Ukraine war. A week from now is the one-year anniversary of the start of the war and now many are saying Russia is gearing up for a second major offensive. Furthermore, the Black Sea grain export deal is set to expire in March and negotiations on extending it will begin next week. These two events can lead to volatility in the market, and it would be a good idea to set some target orders for remaining DP bushels or on-farm storage.
As we move towards the March report dates continue thinking about prices for the fall and where your cost of production is. Give us a call and we can walk through a marketing plan that fits your needs. Hope everyone has a great weekend and stay safe.
Steve Bricher
Grain Operation Manager, Urbana (Region 3)
Well, the Super Bowl has come and gone. That means no more football until August. By the time we watch our next football game we will have a good idea of what 2023 has brought us.
The markets continue to grind sideways. Corn and soybeans have been range bound since the first of the year. It does not look like they are going to be breaking out of these ranges anytime soon. We see farmer selling come to the market as we approach the higher end of the range and then the market falls back to the lower end of the range. Basis in the area has been weak as the local farmer continues to move grain with the good weather and lack of carry in the market.
The biggest question I continue to receive is “What do you think these markets are going to do?”. I have a hard time believing that we are going to see much movement in prices over the next 45 days unless China comes to the market in a big way. South America is harvesting and has a monster crop in Brazil that will keep the world soybean buyer happy for the next several months.
The next big news maker will be the Planting Intentions Report at the end of March. That will set us up for where prices start to work over the spring and summer. The extended weather forecast is showing a better summer weather pattern than we saw last year. If we get the acres planted and have a good growing season, I see next fall’s prices lower than they are today.Lisa Warne
Grain Merchandiser, Marysville (Region 4)
I hope you all were able to enjoy that 70 degrees we briefly saw this week! The grain markets are ending the week on a quiet note with the lack of much bullish news to stir things up. Early in the week we saw a bump higher on a lower Dollar Index, rains slowing Brazilian soybean harvest, and continued dryness in Argentina. However, harvest in Brazil did pick up midweek and the US Dollar Index turned around, putting pressure on the grain markets. US soybean exports are still above the seasonal pace, but they are starting to trend lower as more beans become available from Brazil. Corn exports, however, are falling further behind seasonal trends and the pace needed to meet USDA expectations. Corn and beans are unwilling to give up any ground to the other as we near planting season, so markets are at a bit of a stalemate.
Just a reminder that the markets are closed on Monday for Presidents’ Day, but your Heritage locations will be open. We will be offering free Delayed Price for corn and soybeans on newly delivered bushels starting Monday. Only 31 days until spring!