Weekly Grain Update – October 3, 2017

Mississippi barge

 

10/3/17

The USDA came out with its Quarterly Grain Stocks report on Friday and pegged corn at 2.295 B bu and beans at 301 M bu.  These numbers indicate the final amount of corn and beans left over before the new crop year starts on September 1st.  As a comparison, the final numbers from last year were 1.737 B bu of corn and 197 M beans.  These numbers indicate that there are very ample supplies of corn and a slightly tighter bean supply than originally thought.  This helps to explain the higher market on Friday as several funds decided to cover their short positions after these numbers were released.  However, by the close of the market on Friday, many elevators pre-hedged their anticipated purchases over the weekend, and all of this selling pressured futures right at the close.

The Mississippi and Ohio Rivers continue to struggle with shipping problems during this harvest.  The Ohio River is closed at lock 53 as it is broken down.  Many areas on the Mississippi are struggling with low water levels, and many have hit bottom on their way to the Gulf.  The lower water level is forcing all barge loaders to only partially fill their barges so they have lower drafts and so they don’t bottom out.  All of this is occurring during the most active barge loading season of the year, during October.  This is causing excess capacity to not be utilized and more barges are needed to ship the same amount of grain.  This is causing barge freight to scream higher as barge freight costs reach levels during 2014.  Rumors have surfaced that barges traded at 1300% of tariff today which is a huge number.  It will be a long season this year if this situation remains.

Local Update

Locally, we are seeing many beans being delivered into our facilities.  Most of the beans are dry, with only a few loads over 13% moisture.  Beans continue to be dry, but the stems are difficult to cut.  We have not had a killing frost as of yet, and thus most bean plants and all vegetation are not dead yet.  The dry weather has allowed many acres of wheat to be planted, and significantly more acres than last year.  Once we get a rain, this wheat should germinate and grow aggressively with the warm temps.  Everyone planting wheat should be looking at forward contracting their wheat for July delivery into the elevator.  The wheat market is offering some wonderful carries which is resulting in better prices for next July.  I suggest placing targets at $4.50 and then place a target to sell every 25 cents higher and reward the market on rallies.

As you deliver your grain into our CHS Larsen Co-op elevators this fall, please communicate with your drivers on what you wish to do with your grain when delivering.  At the elevator, the scale operator will need to know if you want to sell your grain, place it on an existing contract, place it in Delayed Price or Open Storage, or into Grain Bank if you are using it for feed.  It is critical that we know what to do with your grain BEFORE the truck leaves the elevator.  This will help to make sure there are no delays in processing your grain deliveries.  Unfortunately, if your truck leaves without telling us what to do with your grain, we will be forced to place your grain into Delayed Price and title will be lost.  Please avoid this mistake by communicating with your drivers or simply calling our office so we do not make a mistake on processing your grain shipments.  We greatly appreciate your help in this matter.

For farmers delivering into Seymour, there is a major construction project being completed at the main intersection of town.  Please look at the easiest way to get into our facility by the map posted online.  Any questions, please call the Seymour or Center Valley office.

As always, if I can help you with anything, please call me at Readfield.

Marcus

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