3 Big Things Today, Oct. 26
Soybeans Fall, Corn Little Changed as Investors Ponder Crop Progress
Soybeans declined while corn was little changed on speculation that today’s crop progress report will show bean harvest is almost complete.
About 77% of soybeans were collected as of Oct. 18, according to the U.S. Department of Agriculture. While some areas had rainfall last week, the Midwest where the bulk of soybeans are grown were dry, which allowed growers into fields. (http://www.agriculture.com/news/crops/usda-cn-harvest-moving-fward-quality_2-ar50741)
The corn crop was 59% finished as of last week, the USDA said. The agency is scheduled to release its weekly crop progress report today at 4 p.m. in Washington, DC.
Soybean futures for November delivery fell 3 ½ cents to $8.92 a bushel overnight at the Chicago Board of Trade. December soymeal futures declined 40 cents to $304.70 a short ton. December soyoil dropped 0.23 cent to 28.34 cents a pound.
Corn futures for December delivery gained ½ cent to $3.80 ¼ a bushel in Chicago overnight.
Wheat for December delivery jumped 6 cents to $4.96 ½ a bushel on the CBOT.
Farmers May be Holding Onto Corn, Beans
Some analysts and traders believe we’ve reached harvest lows and that prices will begin to rebound from here as buyers make their way through excess grain and soybeans.
While that may be true, some traders don’t believe farmers are or were ever willing sellers of corn and soybeans. It seems that they’re not willing to let beans go for less than $9, according to analysts.
“Despite all of the pre-harvest talk about farmers selling beans and storing corn, there has been very little farmer selling of either crop,” said Tomm Pfitzenmaier, the president at Summit Commodity Brokerage in Des Moines. “Farmers seem committed to storing beans and indicate that they have little interest at this point of selling beans for less than $9.00. This will certainly put a lid on rallies, but the lack of selling is also putting good support under the market as well especially with good export demand showing up.”
Demand has been buoying prices, as China and “unknown destinations” have stepped it to purchase U.S. oilseeds despite the strengthening dollar. Still, with farmers allegedly putting a lot of supplies into storage this year, there may be a lot around for overseas importers to purchase.
With on-farm storage only rising 1% in 2014 from the prior year, it may be difficult to find a place to put those soybeans. In fact, the limited amount of on-farm bins is leaving some participants in agriculture.com’s Marketing Talk perplexed as to where all of the new-crop beans are being stored. (http://community.agriculture.com/t5/Marketing/On-Farm-Storage/td-p/610574)
Regardless of where they are, it’s likely that farmers are holding onto supplies as they wrap up the harvest. With ample supplies around, will that put a lid on prices, or will strong demand from global importers be enough to underpin futures in Chicago and cash prices in the country?
Rains Expected in Next 48 Hours
Rainfall is expected for at least the next 48 hours in the U.S. Midwest, which could delay the corn and soybean harvest. (http://www.agriculture.com/weather)
Soybeans were likely about 85% to 90% collected as of yesterday – the USDA is expected to release a report saying as much this afternoon – while corn was 75% to 80% harvested.
A chance of precipitation is expected in parts of Nebraska, western Iowa and western Missouri in the next two days, while rain is more likely to fall in eastern Iowa, Illinois and Indiana, according to the National Weather Service (www.weather.gov).
The agency has issued a frost warning in a stretch of land from the Texas Panhandle to northeastern Kansas, which could leave some recently emerged winter wheat vulnerable to frost damage since there’s not yet a protective layer of snow.
Get involved in the discussion in Marketing Talk:(http://community.agriculture.com/t5/Marketing/bd-p/marketing)