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The Grain Markets – September

Aurora Cooperative 5 days ago

Market Recap

We have continued to see a basis push for Sept corn as old crop stocks in Central Nebraska have remained low and local ethanol plants and cattle feeders have struggled to find corn or dry enough new crop bushels to hit the market.  USDA Supply and Demand reports have continued to see smaller carry outs for the 2022/2023 marketing season with corn coming in at 1.2 million bushels and beans at 200 million.  Argentinian beans have been the focus as China continues to call their number.  China purchased 10+ cargoes last week from Argentina, but not all was lost, as China stepped in and purchased 136,000 MT of US soybeans Monday morning. We have not seen enough yield reports to see the whole picture and in the next 15 to 30 days we will see if this crop gets bigger or smaller.

Market Projection

It is tough to see what the future might hold, as my crystal ball might have been dropped and cracked, so here goes nothing.  I do believe we could see some rationing on the corn side of demand this year, due to less export demand, as inflation and the US dollar continues to firm.   We have heard of all but disasters and others saying this might be their best corn yet.  I do feel like we will fall in that gap of 170 to 171 US average corn yield and see corn futures remain overpriced as we head into the spring months,  hanging between 6.50 and 7.00 futures.  On beans I see a different story, Brazil projected to have a strong start to the next bean crop that is going in the ground, Argentina being a bigger player in the export market and US beans export program getting smaller September through January make it tough to paint a rosy picture. 

Tip

It has been a wild growing year and continue to see that throughout harvest.  Take advantage of the spot market for corn harvest and bin what you can. In my opinion, December could see a basis push and a pull back in January through March as centers are being pulled.  Then it could be a race to the top in basis April through September, but watch out for the inverses again, which can create a false basis appreciation if you don’t protect the spreads.  On the other hand, beans need to come to town between harvest and December as all export demand will be gone by the middle of January.  Over the last 3 years, basis has depreciated the longer we held beans.  We could see that even early this year, as we are looking to have a smaller export program and could potentially see more beans that need to go to the processer markets locally.   Please feel free to call on any of the Aurora Cooperative grain merchandisers to talk about a plan for marketing your 2022/2023 crop. 

As always we wish everyone a safe, efficient and happy harvest!

Damon Kasselder