Weekly Grain Update – October 9, 2017

soybean harvest

10/9/17

The USDA will be out with their October crop report this Thursday at 11 am.  I continue to recommend growers to use target orders on report days as the market gyrates greatly almost immediately once the numbers are released.  Many times we see opportunities present themselves moments after the numbers are known but vanish by the time the market closes.  If you still have bushels you must sell for this fall, lets take advantages of these opportunities as they will likely be few and far between in the coming days.

Many areas of the Corn Belt received rain over the last few days.  Most areas received between 1.5 to 3 inches of rain since Wednesday.  This quickly stopped any bean cutting for the moment.  Locally, we are seeing no rain in the forecast until Saturday.  This will allow the beans to dry out or give you the opportunity to go after some early corn before switching back to beans later in the week.  The rain might have been a blessing in disguise as most beans were terribly dry.  Most beans being brought into our facilities were testing 9-12% moisture.  Obviously, 13% is dry and anything under this moisture is hurting you with excess shrink as the beans loose moisture in the field.  With the rain, you will now have the opportunity to cut beans much closer to 13% which will help boost bushels per acre.

This rain will put a damper on harvest selling pressure for the next day or so.  As a result, we have seen bean futures catch a bid and are currently moving higher again.  Currently, Nov ’17 bean futures are at $9.75.  I still feel we have an opportunity to rally Nov bean futures to the $9.85 to $10.00 level as this will represent the 50% to 61.8% retrace of the entire July – Aug slide.  Again, if Nov bean futures can rally into this window, I would seriously consider selling all remaining beans that must be sold this calendar year for your operation.  This would create a double top on the charts and Nov bean futures could easily fall quite dramatically if achieved.

On corn, we are seeing December corn futures have a decent amount of support at $3.50.  I don’t believe Dec corn futures will fall below $3.45 as the farmer is not selling corn.  We continue to see the farmer selling beans for cash flow and will tuck away every kernel of corn as possible.  This will cause futures and basis to remain firm.  The real test will be in two weeks when nearly all of the Corn Belt is in active corn harvest.  If we cannot break Dec futures during this period, this will likely be the low for the year.  Futures and basis will react to what the farmer does.  If he is not a seller, the basis and futures will be forced to do the work to create movement.  I encourage all of you tucking corn away in every crack on your farm to NOT get complacent.  In order to protect your operation, you need to be proactive and lock in corn sales later in the crop year where futures and basis is much stronger.  The corn market is offering excellent carry, where you can gain approximately 30-40 cents per bushel if you can hold the corn until July, for example.  You can only lock in this carry if you forward contract the bushels now for July delivery.  You cannot wait until July and sell it spot because the cash carry will vanish by then as the cash price will likely be very similar to what it is today.

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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