Grains are lower on Wednesday, with livestock mostly higher.
Corn Drifts on End of Month Profit Taking
Mark Knight of Farmers Keeper Financial says corn is drifting lower with some end of month profit taking and after having digested the lower yield estimates from the Pro Farmer crop tour.
It is also first notice day on Friday which likely will force some liquidation.
Does USDA Come Down on Corn Yield?
He says the market discounted USDA’s 188.8 bu. per acre corn yield, but may think Pro Farmer’s estimate of 182.7 bu. is too low and is looking for a logical spot in the middle.
Will USDA come down on their corn yield in the September WASDE as they get objective field data?
Knight thinks it may be an incremental cut at best, even with more data than just satellite imagery and farmer surveys.
So the corn market may be range bound for a while waiting to take its cue from yield date from the combine.
Soybeans Drift on Lack of China Buys and Basis Tanks, Despite Dry Conditions in ECB
Soybeans had a nice run off the lows but Knight says that market is also seeing some end of month profit taking and pausing awaiting more yield data.
A dry August in parts of the Eastern Corn Belt have likely trimmed yield on soybeans but Knight says that is being overshadowed by the lack of China purchases.
A Chinese delegation is in the U.S. this week and may talk about soybean purchases but until those materialize the market continues to see basis widening in the country ahead of harvest.
Soybean basis has tanked in the Northwest Corn Belt states and some elevators aren’t even offering a fall bid due to the lack of China export demand.
He says the crushers are also able to push bids lower knowing the new crop is right around the corner.
HRW Wheat Hits Contract Lows
Hard red winter wheat futures again hit contract lows on Wednesday with a higher dollar and rains chances in the winter wheat belt.
However, he thinks the ample supplies, especially from Russia, continue to weigh on global wheat prices.
Exports have been good, but just not good enough to overcome the bigger supplies.
Plus, Knight says the lower corn prices are keeping wheat out of the feed ration.
Should Producers Store and Wait for Better Prices?
With ample supplies of corn, wheat and soybeans and lower prices it looks like farmers should store grain at harvest.
However, storage options are limited and so Knight says he is talking to producers about reownership strategies if they have to sell off the combine and don’t have room to store.
He says there is carry in the market and producers can take advantage of that, plus there are normally better prices later in the year.
He says, “Almost every single call with a new customer has been re -ownership. I don’t have storage or the guys that have storage are going to absolutely fill up to the brim. And so they’re looking for ways to reown and whether it’s through futures or options or what have you or storage themselves. You know, I think most of the guys are going to get away from commercials paying for commercial storage.”
Knight says however he fears prices could stay at lower levels longer than normal just due to bigger supplies of all of the major grains.
