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With the very beginning of soybean harvest, basis levels have gyrated wildly, as processors are transitioning from the tight old crop situation to plentiful new crop supplies. Basis levels can change multiple times per day, in some locations, as it gets down to one to two days before widespread harvest begins. It is a balancing act until more beans are flowing.

Today's export sales for corn were at the high end of expectations with several south east Asian countries the principal buyers. Export sales were certainly not large for soybeans this week. At only 489,400 metric tons, they were below expectations. The primary buyer (virtually the only buyer) was exactly as expected -- China. Where would we be without them?

Yield reports so far, from the Delta, the Southeast, Illinois, Indiana, Ohio, Kentucky, Iowa and Nebraska, are very impressive. For some of these areas, it is easy to understand -- rain was plentiful and temperatures were mild, so southern crops did not feel stress during the growing season. The same comment is true for dryland crops in Nebraska.

The October crop report should therefore attract attention as market participants will want to see how these early yields ripple through the overall crop sizes. Some may also feel more comfortable once the actual acreage is known (the USDA will use data from the FSA certifications to adjust acreage).

Some are commenting after the violent weather related (frost) rally on Tuesday that the lows are in the market. This is perhaps wishful thinking. It will be hard to determine a bottom until the market understands how many bushels crop farmers will sell off the combine.

Actually, farmers will stuff their storage bins as full as possible. Many have not sold many bushels forward and are not impressed with current prices. This should cause an improvement in prices and basis levels after harvest, but it will not create a bull market. If anything, commercials know they can just sit and wait for the bushels to come to them as the season progresses. Basis levels will see improvement after harvest as commercials bid for hedged inventory from local elevators. Otherwise, grain bins could become like savings accounts. Farmers will only sell what is necessary to pay bills and keep their checkbooks from running dry.

The risk of loss in trading commodities can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial situation.

With the very beginning of soybean harvest, basis levels have gyrated wildly, as processors are transitioning from the tight old crop situation to plentiful new crop supplies. Basis levels can change multiple times per day, in some locations, as it gets down to one to two days before widespread harvest begins. It is a balancing act until more beans are flowing.

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