Did you miss some market news this week? Here's what you need to know.
Ag Marketing IQ
We don’t have the exact quote in front of us, but one closely followed, experienced pundit made the comment earlier this summer that producers could very likely be facing sub $3 per bushel prices when they harvest their 20/21 corn crop. At one time during the early part of the growing season that was probably a reasonable assumption. But things do change, and commodity futures prices are EXTREMELY difficult to predict. What happened to jumpstart the corn rally?
Soybean futures are on a tear, rallying last week to the highest level in more than four years. Cash prices topping $10 a bushel give farmers the chance to sell their crop at a nice profit as the U.S. harvest wraps up. Most of the market’s focus is on red-hot demand, thanks to aggressive buying from China as it tries to meet commitments under the Phase One trade deal. Over the next few weeks look for South American weather to take center stage as the rally tries to maintain its hyperbolic rise.
In the last two weeks, agricultural commodities have generated fundamental hopes for record exports and higher prices. But the technical landscape painted a picture of increased concerns for a short term top.
Corn harvest is now 72% complete through Sunday, up from 60% a week ago and well ahead of the prior five-year average of 56%. Of the top 18 production states, only Michigan (34%), Ohio (32%) and Wisconsin (40%) have yet to reach the halfway point, according to the latest crop progress report. Soybean harvest is even further along, making it to 83%. North Carolina (21%) is the only top-18 production state that hasn’t yet cleared the halfway mark. The 2020/21 winter wheat crop is now 85% planted, meantime, up from 77% a week earlier, and moving ahead of the prior five-year average of 80%. And 62% of the crop is emerged, also coming in ahead of the prior five-year average of 60%.
Dry conditions continue to plague farmers on the Plains who were largely exempt from last week’s precipitation. “Dry conditions with days of high wind has most of the corn flat,” a Nebraska farmer said in dismay. “This makes for slow combining. Yields are down below average.” Another Nebraska farmer warned that “without subsoil moisture, we could possibly see a 2012 repeat.” “Harvest will be at a standstill for quite a while for those still needed to harvest soybeans,” in Ohio, according to a local Farm Futures reader in Feedback from the Field. “The fields are even getting too wet for picking corn!”
The latest grain export inspection report from USDA, out Monday morning and covering the week through October 22, once again showed a strong soybean tally as year-to-date volume for the 2020/21 marketing year continues to dominate last year’s pace. Wheat also notched a moderate weekly improvement, but corn slumped 30% below the prior week’s total.
The 2020/21 marketing year is already off to a better start than just seven months earlier. While many factors help determine market prices, export demand for corn has been one of the most significant drivers behind recent price rallies. Our corn outlook will provide an in depth look at exports as well as other factors influencing corn prices.