Grain Gleanings

Marketing Opportunities

By Jeff Moritz, Lead Grain Merchandiser

Wheat harvest has started in earnest this week and by all accounts yields have been pleasantly good. Customers have been reporting yields in the 70-95bpa range. Hopefully, those results are a positive foreshadowing for our Fall Crops.

Speaking of Fall Crops, we just finished the pricing of our Short Dated Average Seasonal Price program for Corn and Soybeans. Prices ended up being very respectable as compared to the current New Crop Market
as Corn Price is $4.62 December Futures versus a current December Futures price of $4.08. Soybean price is $11.60 November Futures versus a current November Futures price of $10.45. Our Longer-Term Average Seasonal Price Contract is still in Progress, but currently Corn Price stands at $4.65 December Futures and Soybeans are at $11.64 November Futures. If these prices are of interest to you and you would like to know more about signing up for next season’s programs and how the contract works, please contact your local CFC Originator and we would be happy to discuss it further with you.

Corn and Soybean markets are finding it difficult to gain much footing against the seasonal price tendency during this time of year. Charts are showing oversold for soybeans and corn is just now climbing out of oversold conditions which could be that markets have found a short-term bottom. The current prices also trail the 20 day moving averages in a meaningful way. Corn and Soybean prices tend to gravitate back to the 20-day moving average whether above or below. Also, The Fund short, Commercial Long are at historical (record) positions.

While I do not think the market is necessarily set up for rally of significant proportions at this point, I do think the set up of these events just mentioned could provide marketing opportunities that should be acted upon should we see any meaningful price strength. Have a great rest of the summer!

7/19/2024

Yield Question

By Jake Moret, Grain Originator

The local question of the summer has been ‘Did we lose more in the bottoms or gain more on the hills from all the rain/flooding in our area?’ Consensus seems to equal out to a 5% loss of total farm yield. The wet areas in the states have dried out over the past week and the areas looking dry on the drought monitor have received timely rains from hurricane Beryl.  We’ve made it through most of the weather scares for crop pricing, unless we get absolutely cooked the rest of the growing season or a wild early frost. The market is really saying “rain makes grain”.

China needs to purchase beans... end of story. The US export sales are showing 20-year lows and account for over 40% of our demand.

Thankfully grains are showing positive closes on all crops Thursday. I would like to insert a quote we saw on X this week, “The industry is addicted to telling farmers there’s bullish potential – no matter the price, trend or market conditions”.

If you’re looking for a 2024 wheat policy or looking for some marketing assistance, please reach out to a grain originator. We’ve had a small start to the wheat harvest, and we accept wheat at our Marion, Dimock and Tyndall locations.

7/19/2024

Marketing Needs

By Jeff Moritz, Lead Grain Merchandiser

One of the biggest grain market drivers of the year is today. This morning, we will get a USDA data dump in the form of US Quarterly Grain Stocks and Acreage Report. Many in the trade believe that both Corn and Soybean acres will increase modestly from the March Intentions Report. The average trade guesses heading into the report are 90.3 million acres for Corn and 86.7 million acres for Soybeans. These figures would be 300k and 200k increases from the USDA March Report, respectively.

Admittedly there were challenges this spring with what seemed to be constant and significant rain at times, we were able to get the crops in the ground. There will be some Preventive Plant in our trade area to be sure but on the whole crop planting progressed on average and in a relatively timely fashion. The market is also under the assumption that some acres may have been switched to soybeans as the Corn planting window ended in late May. However, keep in mind this report will not factor in any acres lost due to the recent heavy rains and flooding events. Depending on the numbers we see today, it will be the market’s job to work through potential lost acres over the next several months. At this point any lost production determination will be initially settled in the cash market in the form of basis from harvest forward. We may or may not see futures react until much later, maybe not until 2025. That of course will depend on how the demand prospects develop going forward as well.

The acreage report gets the pre report spotlight, but the Stocks Report always has the potential to steal the show. The trade sees increases to the Corn and Soybean Stocks on Hand as of June 1. Average Corn estimate is 4.87 billion bushels on hand which would be well over 750 million bushels on hand from last year. The average Soybean guess is 962 million bushels on hand which is about 170 million more from June 1 of 2023.

Looking at Corn Stocks at face value, it seems rather bearish. However, corn demand has been a bright spot for the row crop market. Domestic demand in the form of Feed and Ethanol have seen solid increases year on year. Exports have been adequate as well, with our #1 Buyer Mexico, patronizing the US global corn business in a meaningful way. All this is to say that US corn usage is finishing better than expected to end the marketing year, however the Supply is adequate enough at this point to absorb any late demand or modest production cuts.

From a stocks perspective Soybeans have a challenging picture. The total of 962 million bushels on hand would be the highest in 4 years. Exports continue to disappoint as the US just has not been competitive in the global market. Brazil and overall South America continues to dominate that business and their window of dominance continues to extend. While we have seen some business shift to the US recently it just has not been enough to cut into the increasingly burdensome supply that the US is facing. Domestically crush has been a bright spot until this spring when we saw some production hiccups. However, overall, this sector should have a solid finish to the marketing year.

Please do not hesitate to reach out to your local CFC originator to discuss your marketing needs for any remaining old and new crop bushels. Have a great summer!

6/28/2024

Central Farmers has a mobile app that provides real time business information at your hands. By partnering with BUSHEL, we are able to empower you, our producers, to make informed and quicker business decisions with CFC.

• Access scale tickets, contracts, bushel balances, cash bids and market information— all from your smartphone.
• Access scale tickets virtually in real time, allowing you to know how many bushels you have delivered and how much still needs to be delivered. The Scale Ticket interface is easy to understand and tracks grade factors such as Moisture and Test Weight.
• Access your contracts that you have with any CFC location. You will be able to see the status of any contract to find out whether it is filled or is still open.
• Access real-time bushel balances of your grain across all CFC locations.
• Access delayed cash bids for all of our CFC locations. You will be able to access Grains, Livestock and Ethanol Futures from CME or MGEX.

You can find the App on Google Play for Android devices or the App Store for iPhones by searching for Central Farmers. Download it today!