A quick market update, futures levels have been sideways over the last month with yields in both corn and beans coming in as expected. The October USDA supply and demand report had corn carry out at 1.172 million bushels and 200 million bushels for soybeans. Basis levels continue to push slightly higher with Mississippi River levels dropping, which in turn has backed up barges shipping into the gulf along with feedlots in the southwest pulling corn from Illinois. The National Weather service shows 9 river gauges on the lower Mississippi at or below their low water threshold. The dry weather is expected to continue through at least the next month, with the 6-10 day forecast not showing much in the way of precipitation. On the Drought Monitor, 82.23% of the US is at least abnormally dry. 100% of Nebraska, Iowa, South Dakota, Missouri and Indiana are at least abnormally dry, with large portions of the western states in D1 or D2 drought or worse.
Corn used for ethanol was estimated at 102.12 million bushels, which is a touch lower than the average corn usage needed to fulfill the USDA’s forecast of 5.275 billion bushels for ethanol. Slow export demand, Ukraine grain export corridor and active US harvest continue to be the main corn stories.
My takeaway is to take advantage of the cash prices we are seeing for harvest in both corn and soybeans. We will need to be watching demand going forward which will dictate basis values once harvest is behind us.
Weston Winkers – Senior Grain Merchandiser