3 Big Things Today, October 13
Corn, Soybeans Gain Overnight as Yields Disappoint
Soybeans rose overnight and corn was little changed on speculation that yields aren’t going to be as good as some thought.
While yields were disappointing during early harvest in the Delta, most traders and analysts expected they’d improve as the harvest moved north. That has happened, but not quite to the extent that most thought. Some growers who saw 200 bushels an acre last year are collecting 150 to 160 bushels an acre this year, according to participants in agriculture.com’s Marketing Talk. (http://community.agriculture.com/t5/Marketing/A-little-help-on-market-report/td-p/609652)
November soybean futures rose 4 3/4 cents to $8.92 1/4 a bushel overnight on the Chicago Board of Trade. December soymeal futures gained 1.40 cents to $310.90 per short ton. December soyoil futures improved 0.31 cent to $28.49.
Corn futures for December delivery were unchanged at $3.80 3/4 a bushel overnight in Chicago.
Wheat for December delivery also were unchanged at $5.06 3/4 a bushel on the CBOT.
Demand Picture For Corn, Beans Not Shaping Up as Hoped
Growers with large corn and bean crops hoping demand would underpin prices may be disappointed this year.
Commitments to purchase U.S. corn by overseas buyers are down 28% from the same timeframe a year earlier, and promises to buy soybeans are down 26%, according to the Department of Agriculture.
Some growers have become optimistic the past couple of weeks as export sales – especially those of beans – have been decent. Yet, their excitement may be unfounded as some of that demand is simply residual from contracts signed during China’s president's recent visit to the U.S., according to Tomm Pfitzenmaier, the president at Summit Commodity Brokerage in Des Moines, Iowa.
“There are many in the trade talking about the better export news we have seen the last couple of weeks hoping that is the beginning of a trend toward better exports,” he wrote in a recent report. “However, much of that was residual effects from the Chinese trade mission to D.C. a couple of weeks ago, and so now we will see if there is a genuine increase in demand or is that was just a one-off affair.”
Soybean exports in the current marketing year were pegged in Friday’s WASDE report at 1.675 billion bushels, down from a month-earlier estimate of 1.725 billion. Corn shipments were unchanged at 1.85 billion bushels.
Farmer selling also is putting pressure on prices. Last week’s commitment of traders report indicated that farmers are in a selling mood, which likely will make it difficult for corn or beans to rally. Buyers can just sit back and wait for supplies to roll in as the harvest moves north, purchasing to fill needs and shunning supplies if ask price is too high.
“The commitments of traders report last week confirmed strong seasonal farmer selling, which could make it difficult to rally above $4 corn and $9 beans,” according to The Hueber Report. “Nonetheless, many traders are sticking to their guns regarding a harvest low and expect the market to rally.”
Dry Weather to Keep Combines Rolling
Weather forecasters in the U.S. Midwest have the easiest job in the country right now. (http://www.agriculture.com/weather)
As with the past couple of weeks – give or take a couple of days – dry weather is expected in the next two days for most of the Midwest, which will allow farmers to speed the harvest.
As of last week, 27% of corn was collected along with 42% of soybeans. The USDA is expected to release its crop progress report this afternoon, a day late because of yesterday’s Columbus Day holiday.
Delta states are expected to get some rain, but outside of the Gulf Coast, it’s dry weather as far as the eye can see.
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