Weekly Grain Update- September 19, 2017

9/19/17

Last week, the big news was the USDA’s September Crop Report, where they pegged the corn yield at 169.9 bpa and beans at 49.9 bpa.  These are huge numbers, and many market participants were surprised by the continued increases in yield.  Many traders want a confirmation that these big yields are actually in the field before they take positions.  As harvest starts in the southern areas, the Delta region is seeing some very good yields on beans.  Even though they are experiencing some damage of 3-5% due to the hurricane rains, generally yields are very good.  As harvest starts to ramp up in many other areas, I get the sense that the yields are mostly there, and they are starting to confirm the big numbers from the USDA.

We are seeing the funds cover their bean short position, and this is supporting the bean market.  There are many index funds who want something to trade.  Corn and wheat are uneventful, and beans are the commodity that might have life.  We have seen the funds be rather aggressive in covering their short in the recent days, and this is one reason we bounced significantly off the lows prior to the close after the USDA report last Tuesday.  Beans seem to be supported compared to corn and wheat.  The market is also seeing the Chinese being rather aggressive in buying our beans for October out of the Gulf.  If they continue to buy our new crop beans, this will add another layer of support to the bean market.  From a cash perspective, the farmer is selling his beans for cash flow, and storing his corn in any crevice he can find.  He hates the cash price for corn, and will only sell if forced to do so.  If this trend continues, we will likely see the basis firm as harvest progresses.  The lack of farmer selling will cause the commercial to also hesitate to sell company owned corn because he also does not own much corn.  All of this will likely cause the corn basis to firm rather quickly after harvest.

Locally, we saw our first load of new beans be delivered into Readfield yesterday.  They were cut on Saturday, and had a moisture 11.9%.  We were all surprised by the moisture level, and many other bean fields are turning rather quickly.  Last week’s heat really helped mature the crop in this area, and likely pushed harvest forward in many fields.  We definitely needed the heat from last week to help progress the crop forward.

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 divers 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.

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

Marcus

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