Weekly Crop Commentary - 7/12/2024

Wes Bahan
Vice President, Grain Division

Good afternoon. Another week of the grain markets making new lows. The fund managers are aggressively adding to their short positions in all three of our major grain commodities. There seems to be no one wanting to get in their way. There is not a sponsor for our grain markets. In the last grain stocks report, we saw the producer holding a lot of inventory, and the depressed prices are not encouraging them to sell. We are seeing some basis moves, especially from some soybean processors, as crush margins are once again in the black and they are struggling for ownership. The corn market seems to be showing basis improvement, but nothing like we are seeing in beans. Sales of new crop continue to struggle even though we did see our first soybean purchase by China this week.

We are getting a supply and demand update from the USDA, but it doesn’t appear that there will be many adjustments made other than acreage planted. We have some hot weather moving in for the weekend and first of the week, but it appears there are some decent rain chances early next week also. By the middle part of the week, we will see some really moderate temperature to bring relief also. Big stockpiles of grain, a nice weather forecast, funds short, and the calendar date are going to make it hard for a big bull run to happen. Thanks and have a great weekend.

Steve Bricher
Grain Operation Manager, Urbana (Region 3)

We have made it to mid-July, and the wheat harvest is all but done. It was just an okay harvest, but the good thing is that it was early, and the double-crop soybeans were planted 10 days earlier than normal.

In conversations with farmers the last few weeks the mood is not good. They keep asking the same question; "When are we going to see corn and soybean prices rally?" The question I come back to, and it is the question I have been asking everyone since the first of the year, is why do they need to rally?

We are going to have a 2.0+ billion-bushel corn carryover, we planted 91+ million acres of corn, and crop conditions today across the corn belt are as good as we have seen in several years. The only states in worse condition than last year are North Carolina, Texas and Colorado. These are not the "I states". To compound the problem, new crop corn and soybean export sales are lagging as China is going elsewhere for grain.

Old crop corn and soybeans need to be cleaned up. There is not much hope for a huge rally in either unless we really turn out dry come August. It is hard to get excited about selling new crop at these price levels, but many are comparing this year to 2014, when  corn and soybean prices fell from mid-July to the end of September. We will have to see what Mother Nature does over the next 6 weeks, but today, we are going to have to see if we can find a bottom to this market and find some support for grain prices. As a friend of mine in the industry always says "The cure for low prices is low prices."

Lisa Warne
Grain Merchandiser, Marysville (Region 4)

Happy National French Fry Day! I guess I’ll be eating fresh-cut fries at the Logan County fair tonight. Looking at today’s USDA report, old and new crop carryout was slightly less than anticipated by the traders on both corn and soybeans. This gave each a little bounce after the report at noon, but as of this writing, it’s struggling to stay in the green. Wheat did not fare so well, with bearish data coming in from higher production and carryout numbers than expected.

This week brought a 5¢ improvement on both cash corn and soybean basis levels. Crop condition ratings continue to improve, not giving the market any bullish fodder. The U.S. corn crop maturity is also advancing at 24% silking, 10 points ahead of average. Ohio is 15% silking, 11 points ahead of average. With the new crop coming along nicely, it’s just hard to find any headlines for the market to move higher right now. Have a great weekend and we’ll chat next week!