Markets-122316-scyther5-ThinkstockPhotos-2000 scyther5/Thinkstock

Morning Market Review for Sept. 29, 2020

Rapid harvest paces weigh on corn, soybeans. (Comments are updated by 7:30 a.m. Central Time.)

Wheat follows corn and beans lower despite weakening dollar, higher Russian prices

  • Corn down 2-3 cents
  • Soybeans down 2-4 cents, soyoil down $0.37/lb, soybean meal down $0.1/ton
  • Wheat down 1-2 cents

*Prices as of 6:55 am CDT.

Quote of the Day: A Feedback from the Field grower in Ohio has provided our first yield estimates for the Eastern Corn Belt. “What we have harvested so far has 19-22% moisture and average for one field was 170 BPA,” the farmer reported yesterday. “Not bad for not much rain but must have come at the crucial time it was needed. Have a safe harvest everyone!!!”

How is harvest going on your farm? Click here to share your crop updates via a short survey. Results are updated daily in our interactive map so you can stay in the loop on harvest development across the country.

Corn

Corn futures fell this morning on rapid harvest progress and trepidation over tomorrow’s Quarterly Stocks report. But a clear weather forecast for the foreseeable future encourage quick harvest paces and limited overnight gains. December futures fell $0.0275/bushel to $3.64 in overnight trading while March futures dropped $0.025/bushel to $3.73.

Cash corn prices fell at ethanol plants yesterday on rising harvest pressure. Basis was mixed at two processing locations in the Corn Belt yesterday. Cash offerings fell at a Lincoln, Nebraska elevator. Cash sales remain steady as harvest progresses.

Location

9/25/2020 Basis (in cents/bushel)

9/28/2020 Basis (in cents/bushel)

Daily Change

Elevators

     

   Cincinnati OH

-9

-9

0

   Burns Harbor IN

-15

-15

0

   Lincoln NE

-20

-25

-5

   Chicago IL

-45

-45

0

   Council Bluffs IA

-19

-19

0

Processors

     

   Chicago IL

10

13

3

   Decatur IL

-10

-10

0

   Cedar Rapids IA

13

10

-3

   Blair NE

-12

-12

0

River Terminals

     

   Toledo OH

-15

-15

0

   Seneca IL

-17

-17

0

   Savanna IL

-26

-26

0

   Davenport IA

-14

-14

0

   Morris IL

-45

-45

0

Rail

     

   Columbus OH

10

10

0

   Evansville IN

16

16

0

   Hereford TX

105

105

0

   Fort Worth TX

105

105

0

Ethanol Plants

     

   Linden IN

5

5

0

   Union City IN

10

10

0

   Annawan IL

-1

-5

-4

   Council Bluffs IA

-12

-15

-3

December futures price as base.

     

Source: Refinitiv

   

 

 

Harvest progress ramped up in strong fashion last week, despite weekend showers slowing activity East of the Mississippi River. According to yesterday’s Crop Progress report, as of September 27, 15% of U.S. corn had been harvested. While it was a 7% increase from last week, progress fell 1% behind the five-year average for the week, due in large part to slower harvesting paces in Southern growing states.

But it is still early – only 75% of corn across the country is mature. And while that is 16% higher than a week ago and 10% ahead of the five-year average, there is still a substantial amount of late-planted acreage that needs a little more time to dry down.

Corn conditions stabilized at 61% good to excellent for the second week in a row for the week ending September 27.

After a weakened showing last week, corn exports rebounded in this week’s export inspections report from USDA, released yesterday morning. For the week ending September 24, corn volumes weighed and/or inspected for export increased 5.4% to 31.8 million bushels. Four weeks into the 2020/21 marketing year, 2020/21 corn exports are 79% higher than the same period a year ago.

But export loading paces have fallen short of USDA’s 2.325-billion-bushel target for the past several weeks. U.S. corn exports need to load out 45.2 million bushels on average to meet USDA’s demand target for exports.

Soybeans

Improving soybean conditions and a rapid harvest pace sent prices in the soy complex lower this morning. A dry forecast also weighed futures prices lower as November futures dipped $0.03/bushel lower to $9.9325. October soymeal futures followed suit, down $0.37/lb to $32.92.

Soymeal supplies continue to be tight in the short-run due to scheduled plant closures for maintenance in the South and Midwest. But with shrinking margins and an expected influx in supply due to harvest, soymeal prices could ease as soybean harvest progresses. The first signs of those effects was evident in soymeal futures prices this morning as the October soymeal futures contract followed soybean prices $0.1/ton lower to $332.50.

Soybean basis edged lower at processing facilities across the Midwest yesterday while strengthening on the Mississippi River, boosted by robust export demand from China. Harvest progress was stalled by rains covering acreage east of the Mississippi River.

Location

9/25/2020 Basis (in cents/bushel)

9/28/2020 Basis (in cents/bushel)

Daily Change

Elevators

     

   Cincinnati OH

-3

-3

0

   Chicago IL

-10

-10

0

   Burns Harbor IN

-10

-10

0

Processors

     

   Decatur IL

0

0

0

   Decatur IN

-20

-20

0

   Morristown IN

-10

-15

-5

   Lafayette IN

-20

-20

0

   Sioux City IA

-55

-55

0

   Des Moines IA

-45

-45

0

   Cedar Rapids IA

-18

-25

-7

   Council Bluffs IA

-45

-45

0

   Lincoln NE

-40

-40

0

River Terminals

     

   Toledo OH

-20

-20

0

   Seneca IL

-60

-60

0

   Savanna IL

-19

-14

5

   Davenport IA

-15

-15

0

   Morris IL

-45

-45

0

Source: Refinitiv

     

November futures price as base.

     

 

The Brazilian soybean lobby, Aprosoja, butted heads the Brazil Agribusiness Association (Abag) over reducing deforestation in the Amazon rainforest and officially severed ties with the non-government organization. Deforestation is a highly contentious issue among Brazilian farmers. President Jair Bolsonaro gained farmer support in his 2018 election by supporting farm expansion.

Brazilian ag exports have soared in recent years due to increasing yields. Farm acreage has increased in recent years due in large part to illegal deforestation efforts in the Amazon, allowing Brazil to become the international soybean supplier of choice. Between July 2019 and July 2020, deforestation in the Amazon increased 34.5%.

Where corn harvest continues to wait for lower moisture readings, the dry late summer weather is favoring a fast soybean harvest pace this year. As of Sunday, 20% of U.S. soybeans had been harvested, up from 6% a week ago and 5% higher than the five-year average. Harvest paces are ahead of schedule in the Northern Plains and Mississippi Delta.

A dry maturation period continued to accelerate leaf dropping paces ahead of historical averages. By September 27, 74% of U.S. soybeans were dropping leaves, up 15% from a week prior and 5% ahead of the five-year average. Overall crop conditions improved 1% on the week to 64% good to excellent.

To store or to sell? That is a question on many farmers’ minds as combines roll through the countryside. Advance Trading’s Dave Fogel outlines marketing options for farmers who may have lost on-farm storage capabilities during the August derecho wind storms in the latest Ag Marketing IQ column. Evaluating commercial storage costs is a necessary first step, but with little carry in soybean futures, farmers may find more economical savings by purchasing call options in tandem with commercial storage may provide profitable revenue options to farmers with damaged grain bins.

Soybean export loading paces remain strong as harvest ramps up, but weekly volumes dipped for a second straight week. For the week ending September 24, U.S. soybean volumes inspected for export totaled 44.5 million bushels, down 6.2 million bushels from the week prior. Volumes to China made up the lion’s share of weekly shipments at 33.6 million bushels, up 0.3 million bushels from last week, while other buyer interest remained relatively muted.

But it likely matters little – loading paces support USDA’s 2020/21 export demand target of 2.125 billion bushels as year-to-date shipments surpass 2019/20 shipments for the same period by 53.7%.

Wheat

Contract

Price Change*

Price*

Chicago SRW – December Futures

-$0.0075

$5.495

Kansas City HRW – December Futures

-$0.015

$4.8125

Minneapolis HRS – December Futures

-$0.005

$5.29

 

Wheat prices followed weakness in the corn and soybean markets this morning, though losses were limited by strengthening wheat prices in Russia. Dry weather in Russia and the U.S. was also cause for concern amongst traders, capping losses despite increased prospects for Australian wheat crops. A weaker dollar also helped to minimize losses as the ICE Dollar Index fell 0.19% to $94.120.

Cash prices for soft and hard winter wheat in the Midwest and Southern Plains were largely unchanged yesterday. Farmers continue planting winter wheat crops amid dry soil conditions, though showers in the Eastern Corn Belt yesterday should help newly planted winter wheat crops in the region.

Protein premiums for hard red winter wheat delivered by rail to Kansas City rose for wheat containing 12.0% - 12.8% protein, as shown below:

HRW Wheat Protein Content   

Basis Range**

Change

Ordinary      

+85/+95

 

11.00%

+107/+117

 

11.20%

+108/+118

 

11.40%

+108/+118

 

11.60%

+110/+120

 

11.80%

+120/+130

 

12.00%

+130/+140

+5

12.20%

+130/+140

+5

12.40%

+130/+140

+5

12.60%

+130/+140

+5

12.80%

+130/+140

+5

13.00%

+140/+150

 

13.20%

+140/+150

 

13.40%

+140/+150

 

13.60%

+140/+150

 

13.80%

+140/+150

 

14.00%

+140/+150

 

**Premium in cents/bu. over December futures

Source: Refinitiv

 

Corn and soybean harvests have proved to be a larger hindrance to winter wheat planting progress than dry soils. This week’s Crop Progress report found winter wheat planting progress to be 35% complete as of September 27. Paces increased 15% from a week ago and are currently 2% higher than the five-year average. About 10% of the planted crop had emerged as of Sunday, up 7% from a week ago and higher than the five-year average of 8%.

Weekly wheat export volumes bounced back to healthy paces after dipping last week. For the week ending September 24, U.S. wheat exporters weighed and/or inspected 20.7 million bushels of wheat destined for international buyers, up 2.2 million bushels from the previous week. Year-to-date wheat exports remain 8.2% higher than the same period a year ago. Loading paces over 17.7 million bushels all but guarantee U.S. wheat exporters will hit USDA’s demand target of 975 million bushels for the 2020/21 marketing year.

Wetter than expected weather in Australia this winter will provide a stark contrast to drought conditions suffered in the Land Down Under the past three years. But as temperatures in the Pacific Ocean cool, Australian weather officials moved the La Niña weather event to an active alert overnight. A La Niña weather system will likely bring increased levels of rainfall and more tropical cyclones to Australia’s northern and eastern regions. Heavy rains have already boosted yields for the 2020/21 hard white winter wheat crop, due to be harvested within the month. The updated weather event, expected to be more moderate than the 2011 La Niña event, will likely have a positive impact on sowings and yields for the 2021 crop as well.

Weather

Cooler temperatures will follow yesterday’s rain system, which will shift to the East coast today, according to NOAA’s short-range forecasts. Showers are likely in the Great Lakes regions today and tomorrow, though total accumulation is expected to be light. Clear skies in the rest of the country should allow harvest and winter wheat planting activities to continue unhindered today.

Financials

Coronavirus cases in the U.S. rose to by 33,662 from yesterday to 7,150,150 cases as of this morning according to the Johns Hopkins Coronavirus Resource Center. The death toll increased by 329 lives to 205,091 deaths as of press time. The global death toll surpassed the 1-million-mark last night, killing more people since last winter than the total global deaths from malaria, influenza, cholera, and measles – combined.

Harvest time is typically the busiest time of the year on the farm. But using a few tricks to manage the hectic activity can help farmers to communicate clearly and effectively during the busy season. Preparing for harvest activities – as well as issues that may arise – and knowing how to prioritize tasks can help farmers to calmly manage the chaos, Water Street Solution’s Darren Frye suggests in the latest Finance First column. Both methods of management can help farmers to delegate work more effectively so they can spend more time on management activities.

Cattle futures rose yesterday, boosted by strong packer margins and rising consumer demand leading into the holiday season. Rising wholesale beef prices continue to be underpinned by strong retail demand as consumers continue to eat more meals at home. Nearby pork prices also increased on strong consumer demand. Rising prices in the livestock arena favor grain producers as the expansion signals increase demand for feed grains.

U.S. stock futures were mostly quiet in overnight trade as investors await results from tonight’s presidential debate. Looming in the back of most traders’ minds this morning was the diminished hope for a possible coronavirus stimulus package that likely will not be passed by Congress in 2020. The S&P 500 futures dipped 0.12% to $3,342.00.

Hide comments
account-default-image

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish