By Jeff Moritz, Lead Grain Merchandiser
While the late winter thaw has been very welcome, the markets have yet to follow suit unfortunately. Corn and Soybean both made fresh new lows this week ahead of the USDA’S February WASDE Report on Thursday. At the time of this writing, I do not anticipate that this installment of the Domestic and Global S&D picture will provide much positive news. We could certainly see, in fact, the USDA would be justified to lower production for Brazil on both corn and soybeans with the adverse weather experienced in the early production cycle. The USDA could reduce the Argentina crop as that country’s production has dealt with some challenging weather as of late. However, many believe if there are cuts to production, the South American region will still likely produce a Soybean crop close to 200MMT which would be a record.
The domestic balance sheet will have less of a spotlight on it, however some key areas to look at would be from the demand side of the equation. In soybeans, expectations are that US soybean exports will be reduced due to the logistics issues with the Mississippi River in Fall and now with the Panama Canal. It will be a challenge to make up ground as the South America harvest ramps up along with US soybeans being close to a $1.00/Bu premium in the world market.
What could be some catalysts that could spur the higher for some pricing opportunities? The Funds hold a significant short position in both Corn and Soybeans. If we see an event that would compel the Funds to buy their position to cover, that could provide some opportunities for better price levels than where the market sits currently.
From a chart or technical standpoint, Corn is making new lows as it heads for $4.25 and $4.06 price levels for support on the Continuous Chart. Corn and Soybeans are starting to show signs of being oversold on the RSI and could be poised for a bounce. Soybeans appear to have found support at the $11.71 price level. If it falls through support $11.46 would be a key area for it to gain footing. With any rebound in prices the 20-day moving average looks to be a good area to lay off some price risk for both corn and soybeans, which are at $4.45 March and $12.10 March Futures, respectively.
Spring Crop Insurance Pricing as of 2/7/24:
December ’24 Corn $4.76; November ’24 Soybeans $11.75
By Jake Moret, Grain Originator
Marketing in choppy, sideways markets can be a struggle, and some things to pay attention to on charts is to watch resistance levels. These are always changing but can help you identify the top and bottom in the market which are good areas to put in closer offers when looking to truly get some grain marketed whether that’s nearby or new crop. For resistance levels reference March SB futures are 11.85-12.51 currently and March CN futures are 4.39-4.55. Also, to touch on ‘24 new crop which if you are undersold on ‘23 old crop, please don’t let that stop you from focusing on 2024. The Dec 24 CN futures resistance range is 4.73-4.85 and the Nov 24 SB futures are 11.72-12.20. Another chart that doesn’t hurt to look at from a view a little further away is if you can find an honest Average Cash Price and Available-Stocks-to-Use chart but be careful and do your own research. A lot of these charts can just be “marketing analyst” guys throwing numbers around. It never hurts to compare a few people’s thoughts and perspectives. We spend a lot of time reading and listening to articles so don’t be afraid to reach out just to have a chat. With these warmer temps again let’s make sure we are getting in the bins, observing grain quality and moving some grain around.
The world is about supply and demand and at this point I strongly believe we’re going to need a big weather pattern to change these markets significantly to the upside. Please keep in mind it doesn’t seem that a drought affects the US crop nearly as much as being far too wet due to the number of acres that get planted and the newer drought tolerant seed hybrids.
What May Be Affecting Our Grain Prices?
By Becky Johnson, Elevator Location Manager, Salem
There are several factors that seem to be contributing to lower grain prices and have been for a while. Here are a few obvious factors.
One of these factors is a stronger US dollar. When the US dollar is worth more, other countries’ currency struggles for it takes more of their currency to exchange (buy) the American dollar. This in turn gives them less money to buy products so they end up with less product than they used to purchase for the same amount of money.
The production of corn and beans in Brazil has been being harvested in record amounts which is making them more competitive in the grain market industry. This may be reduced in 2024 because they were unable to plant as early due to excessive rains so harvest may be delayed.
Another factor that seems to be affecting grain prices is the inability to transport grain to its final destination. The Mississippi River has been at very low levels making it difficult to easily transport grain to the Gulf of Mexico for exporting purposes. Brazil has been improving their transportation systems as well but are still a work in progress, so some foreign buyers are still seeing trading with the United States more favorable.
The wars also affect prices and exporting due to people investing more in the US dollar as a safe investment.
There are many more factors that can and have affected the markets and the exporting of US grains. At this time these factors seem to be the most reported reasons, but these may vary depending on who you talk to or what you read.
Please reach out to your local grain merchandisers for more options in marketing your grain needs.
We thank you for your loyalty and continued patronage.
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.
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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!
FREMAR LLC strongly recommends farmers verify their seed varieties are approved for significant export markets.
We plan to selectively test loads delivered to our grain handling facilities.
We reserve the right to reject crops with unapproved traits.
If you have seed that is not approved for significant export markets, we encourage you to check with your seed sales representative to see if your order can be exchanged for seed that is approved for global use.
It is ILLEGAL to dump treated beans at ANY grain facility!
the bushels on these contracts must be cashed out at the closing price on that date
and the check will be mailed to the producer.
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Monday - Friday day hours are 8:30am - 1:15pm.
Central Farmers Cooperative continues to purchase grain for all locations while the CBOT is open and closed.
The extended hours continue to put more volatility into the market. We encourage our customers to continue to utilize our offer system. Your offers have the potential to be filled at any time while the market is open.
Please call your local Central Farmers Cooperative location to place your offers as well as any questions you may have.
Thanks as always for your patronage.
Grain Department Manager
Lead Grain Merchandiser
Lyons Grain Originator
Canova Location Manager
Freeman Location Manager
Salem Elevator Location Manager