Weekly Crop Commentary - 8/16/2024

Wes Bahan
Vice President, Grain Division

Good afternoon. We had all kinds of information come out this week. To start things off, we had the USDA make some big changes in acreage from the June report. Corn acres were down some 700,000 for the upcoming harvest, wheat was down 900,000, and soybeans were up 1 million. They also made upwards adjustments of yields on both corn and beans. This made the corn report somewhat neutral, but the soybean report was very bearish. The market reacted quickly as the anticipation of an ending bean carryout next year of 560 million bushels. We did see some flash sales of both corn and beans from the USDA this week, and the report yesterday for new crop bean sales was above expectations. We still have a lot of work to do to get sales of beans back up to the 5-year average. Crushing margins in China are still in the red and they are choking on bean meal as the hog margins remain negative. Old crop corn and beans are flowing at a rampant pace as harvest nears and there needs to be somewhere to put it. This is putting pressure on old crop basis levels to end the week.

Haylee VanScoy
Director of Grain Purchasing

Hello! It’s great to be back with all of you. As many of you know, this summer I was out on maternity leave after the birth of our son in May and soaking up those first few months with him. We are doing well and can’t believe it’s the middle of August already. Time sure does fly! Combines will be rolling before we know it. Don’t forget to assess your current grain sales and talk with your local merchandiser if we need to re-evaluate marketing plans before harvest. Our team is ready to explore alternative solutions that best fit the needs of your operation.

This week’s crop conditions across the nation remain unchanged and continue to hold above-average, comparable to 2018’s ratings. However, Ohio’s corn condition has dropped by 2 points to 62% good/excellent, down from 76% this time last year. Similarly, soybean conditions have decreased by 4 points to 59%, compared to 70% last year.

Between a larger expected crop after this week’s Aug WASDE, ballooning stocks, lackluster exports, and adequate rainfall across a majority of the corn belt, this market continues to trend lower unfortunately. Both SX24 and CZ24 have hit new lows this week, with prices at $9.55 and $3.90, respectively. The market is struggling to find any bullish headlines right now.

Steve Bricher
Grain Operation Manager, Urbana (Region 3)

We are a week away from high school football. I have seen some school buses on the move now that some schools are starting back to class. That must mean fall is just around the corner. Someone in the office asked when I thought harvest would start and I told them that we usually start to see something around Farm Science Review time. At this point I don’t see it being any different this year.

The markets are not being very friendly right now and don’t look to improve much over the next few months. The USDA put out its first harvest forecast for 24/25 and the markets did not react well. The USDA printed the third largest soybean carryout ever which is part of the reason we lost 75 cents in the soybean market in the last two weeks. Also, basis keeps fading as we are getting closer to new crop beans which are 50 cents a bushel cheaper than cash beans. The processor does not want, or need, to sit on a bunch of inventory when they can see cheaper supplies six weeks from now. The corn market is not much different except there is carry so it is not hurting the processor or ethanol plant to buy corn today. However, they are getting plenty. As I have mentioned previously,  the farmer waited until there was no choice but to move grain so he is doing it now. In these places it looks like harvest has already started.

In looking at new crop grain the picture is not pretty. We see corn in the mid 3’s and soybeans in the low 9’s. We know these are not what we want for prices, but it is where we are. There is carry in the markets so we know the bins will get filled but what do we do then? If you want to sit down and talk about options besides DP, let's see what we can do to get some of your crop marketed.

Lisa Warne
Grain Merchandiser, Marysville (Region 4)

We’re continuing to see a lot of farmer-selling, both off Delayed Price and out of the bin. There’s been a steady stream of trucks at Marysville, especially for the month of August. With an influx of grain to the marketplace, basis has weakened again this week. Nearby corn basis is down a nickel and bean basis is fifteen cents less than last Friday. As previously mentioned, soybean basis will continue to weaken until it merges with the new crop bid. If you’re sitting on DP bushels, especially those accruing charges, I don’t see much upside potential before additional DP charges go into effect on October 1st.

I know many of you are looking out at your fields, wishing for rain and wondering why the market isn’t reacting to our dryness. Well, the rest of the Midwest is in much better shape than we are. Some of our southern counties (Clark, Madison, Pickaway) are experiencing a D1 or D2 level drought, but only 6% of the nation’s corn production and 7% of soybean areas are experiencing moderate or worse drought. Kansas, Mississippi, and Ohio are the three states with the highest level of drought in corn and soybean production areas. As I write my commentary Friday morning, they’re calling for some rain today, but I’m not feeling too optimistic about it hitting the ground. I hope I’m wrong though, and we get a nice soaker. Have a great weekend.