Weekly Crop Commentary - 3/10/2023
Mar 10, 2023
Ed Nienaber
Vice President, Grain Division
The USDA released its latest supply/demand update this week and made minor adjustments to the export figures. Corn showed a reduction of 75 million bushels putting the carry-out figure at 1.342 billion bushels. Meanwhile beans were looking at a slight increase of 25MB, thus an ending stock of 0.210BB. Most of the attention and market movement post report was clearly on the reduced production in Argentina where drought conditions have devastated their crops this year. Trade seems to feel that the bumper crop in Brazil will offset the issue in AGR and we find ourselves down thirty cents on the week in corn and currently trading fifteen lower in beans. Despite the crop disaster in Argentina, grains remain under pressure as US-China relations deteriorate and the odds of an extension of the Black Sea export corridor are rising. The nearby cash basis remains steady with not much sign of improvement until we get into planting season. The USDA will be releasing prospective planting intentions at the end of March and private forecasters are currently looking for 91.5-92.0 corn and 87.5-88.0 bean acres this year. Daylight Saving Time starts again this weekend and I for one will be moving the clock forward and leaving it there permanently. Have a great week and continue to be safe!
Haylee VanScoy
Director of Grain Purchasing
Regional grain market outlook meetings kicked off this week in New Philadelphia, Canfield, and Kenton. Thank you to those of you who have attended so far and we look forward to those yet to come. We appreciate Bailey Elchinger and Kendra Dauer of StoneX being our speakers at those events. As many of you have watched the market work lower the last month and felt the uneasiness of where does the market go from here, don’t get caught up in the “it can’t go any lower” mentality and become paralyzed from making decisions when it comes to managing risk and the profitability of your operation. The summary of Bailey’s presentation was to “do something”. It doesn’t have to be all of your production, but we need to be doing something, have a plan, and take action. If you still have old crop in the bin, don’t leave it unprotected. We’re still around $6 corn and $15 beans. Take advantage of levels that are still profitable. As for new crop corn, Bailey had a good slide in her presentation showing a chart from 2014-2021 pricing CZ futures sometime in April compared to sometime in October and every year, except for 2020, producers have seen better pricing opportunities in the spring over harvest. As for new crop beans, we found some support at $13.50 SX on the board today. We are off our highs, but still within our recent range over the last 6 months. Brazil’s harvest is nearly 50% complete, with 70% of their safrina corn crop also getting planted. Concerns with Argentina’s crop and a tighter balance sheet continue to keep bean prices afloat right now, but without some fresh news to feed the bulls this market will likely be quiet until the end of the month prior to the March Planting Intentions report. Hope to see some of you on Monday evening at the Upper Sandusky region’s grain market outlook meeting! Hope you all have a wonderful and safe weekend.
Will Gase
Grain Merchandiser, Upper Sandusky (Region 2)
Good afternoon everyone and happy Friday! This week we are currently down across the board - corn is down 26 cents, beans down 15 cents, and wheat down 34 cents. Corn is down below cash price of 6.00 for the first time in over a year here in Upper Sandusky. With this week’s USDA report, the big number changes were that corn exports were down which caused carryout to rise 75 mmt. This is something to keep an eye on as we approach the March 31st USDA report. More carryout means that we need less of a crop this coming harvest to fulfill our projected demands in the US (export, feed, ethanol). It might be time to think about your cost of production and getting in some contracts for the fall at current prices to minimize your risk. If something big happens causing the market to go north and it ends up being your lowest sale, so be it. However, the market could also turn south and be under 5 dollars for the fall with carryout percentages rising. Again, just something to keep in mind.
Hope everyone has a great weekend. I am looking forward to seeing those who are attending the Upper Sandusky Grain Outlook Meeting on Monday, March 13. As always, reach out if you have any questions or want to look into locking in some contracts for the fall!
Steve Bricher
Grain Operation Manager, Urbana (Region 3)
Grain Merchandiser, Marysville (Region 4)
Good afternoon. Unfortunately, there’s not a lot of positive things to report today. The market screen has shown more red than green this week. Old corn has lost about a quarter while new corn is down about 15 cents. Soybeans have dropped 15-20 cents as well. Wheat has been in a freefall, losing another 30-some cents this week.
Corn carryout will probably continue to get larger with the poor export sales we’re seeing. In Wednesday’s WASDE report, USDA did lower corn export expectations by 75 million bushels, but will that be enough? On Monday’s corn export inspections, we saw the largest total shipment in 7 months at 35.4 million bushels, but we are still short of the seasonal pace needed and well below the five-year average for this time of year. Soybean shipments hit a 5-month low this week as buyers turn to Brazil for their purchases.
At some point we’ll see some bargain buyers step in, but will we fall through more support levels before they jump back in? Let us know if we can keep an eye on target levels for you where you’re still making profit. Have a good weekend!
Vice President, Grain Division
The USDA released its latest supply/demand update this week and made minor adjustments to the export figures. Corn showed a reduction of 75 million bushels putting the carry-out figure at 1.342 billion bushels. Meanwhile beans were looking at a slight increase of 25MB, thus an ending stock of 0.210BB. Most of the attention and market movement post report was clearly on the reduced production in Argentina where drought conditions have devastated their crops this year. Trade seems to feel that the bumper crop in Brazil will offset the issue in AGR and we find ourselves down thirty cents on the week in corn and currently trading fifteen lower in beans. Despite the crop disaster in Argentina, grains remain under pressure as US-China relations deteriorate and the odds of an extension of the Black Sea export corridor are rising. The nearby cash basis remains steady with not much sign of improvement until we get into planting season. The USDA will be releasing prospective planting intentions at the end of March and private forecasters are currently looking for 91.5-92.0 corn and 87.5-88.0 bean acres this year. Daylight Saving Time starts again this weekend and I for one will be moving the clock forward and leaving it there permanently. Have a great week and continue to be safe!
Haylee VanScoy
Director of Grain Purchasing
Regional grain market outlook meetings kicked off this week in New Philadelphia, Canfield, and Kenton. Thank you to those of you who have attended so far and we look forward to those yet to come. We appreciate Bailey Elchinger and Kendra Dauer of StoneX being our speakers at those events. As many of you have watched the market work lower the last month and felt the uneasiness of where does the market go from here, don’t get caught up in the “it can’t go any lower” mentality and become paralyzed from making decisions when it comes to managing risk and the profitability of your operation. The summary of Bailey’s presentation was to “do something”. It doesn’t have to be all of your production, but we need to be doing something, have a plan, and take action. If you still have old crop in the bin, don’t leave it unprotected. We’re still around $6 corn and $15 beans. Take advantage of levels that are still profitable. As for new crop corn, Bailey had a good slide in her presentation showing a chart from 2014-2021 pricing CZ futures sometime in April compared to sometime in October and every year, except for 2020, producers have seen better pricing opportunities in the spring over harvest. As for new crop beans, we found some support at $13.50 SX on the board today. We are off our highs, but still within our recent range over the last 6 months. Brazil’s harvest is nearly 50% complete, with 70% of their safrina corn crop also getting planted. Concerns with Argentina’s crop and a tighter balance sheet continue to keep bean prices afloat right now, but without some fresh news to feed the bulls this market will likely be quiet until the end of the month prior to the March Planting Intentions report. Hope to see some of you on Monday evening at the Upper Sandusky region’s grain market outlook meeting! Hope you all have a wonderful and safe weekend.
Will Gase
Grain Merchandiser, Upper Sandusky (Region 2)
Good afternoon everyone and happy Friday! This week we are currently down across the board - corn is down 26 cents, beans down 15 cents, and wheat down 34 cents. Corn is down below cash price of 6.00 for the first time in over a year here in Upper Sandusky. With this week’s USDA report, the big number changes were that corn exports were down which caused carryout to rise 75 mmt. This is something to keep an eye on as we approach the March 31st USDA report. More carryout means that we need less of a crop this coming harvest to fulfill our projected demands in the US (export, feed, ethanol). It might be time to think about your cost of production and getting in some contracts for the fall at current prices to minimize your risk. If something big happens causing the market to go north and it ends up being your lowest sale, so be it. However, the market could also turn south and be under 5 dollars for the fall with carryout percentages rising. Again, just something to keep in mind.
Hope everyone has a great weekend. I am looking forward to seeing those who are attending the Upper Sandusky Grain Outlook Meeting on Monday, March 13. As always, reach out if you have any questions or want to look into locking in some contracts for the fall!
Steve Bricher
Grain Operation Manager, Urbana (Region 3)
We are another week closer to planting season. The weather is not as nice as we saw in late February, but it is still good to get out and prepare for the coming season.
Corn has taken the brunt of the sell off the last couple of weeks. There is little to no bullish news in the market today to help support the corn market. Yes, Argentina has an issue, but you can only kill a crop once. Export sales were better this week, but we are still almost 200mb behind the USDA projection. Wheat is now in position to compete with corn in the feed market. This, along with the expectation that planting will be early to on time with the lack of snow on the ground across the lower Midwest, begs the question what is there to make corn stay supported or go higher?
Soybeans have held their own compared to corn and wheat. The soybean situation is different than corn. Carryout on soybeans is not increasing, we have seen good sales and shipments and the domestic processor is printing money crushing soybeans. We will have to see if soybeans can continue to hold up as we move into spring.
History tells us that we will see some reason to rally these markets over the spring as we have delays or “something else” hit the market. When that happens, you will need to be ready to react and get grain sold for old and new crop.
Lisa WarneGrain Merchandiser, Marysville (Region 4)
Good afternoon. Unfortunately, there’s not a lot of positive things to report today. The market screen has shown more red than green this week. Old corn has lost about a quarter while new corn is down about 15 cents. Soybeans have dropped 15-20 cents as well. Wheat has been in a freefall, losing another 30-some cents this week.
Corn carryout will probably continue to get larger with the poor export sales we’re seeing. In Wednesday’s WASDE report, USDA did lower corn export expectations by 75 million bushels, but will that be enough? On Monday’s corn export inspections, we saw the largest total shipment in 7 months at 35.4 million bushels, but we are still short of the seasonal pace needed and well below the five-year average for this time of year. Soybean shipments hit a 5-month low this week as buyers turn to Brazil for their purchases.
At some point we’ll see some bargain buyers step in, but will we fall through more support levels before they jump back in? Let us know if we can keep an eye on target levels for you where you’re still making profit. Have a good weekend!