Did Beans Bounce Off a Seasonal Low?
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Market Commentary for 9/24/21
Corn
The corn market wasn’t very exciting this week as the range in closing prices was only 12 cents. This was the smallest one-week trading range since late July.
Harvest is progressing rapidly with wildly variable yield reports due to pockets of disease pressure. The northwest belt’s yields are as expected so far. Yield reports in the south have been really good. With what I have seen so far, the current USDA yield estimate seems reasonable. In the last 16 years, the final yield number in January compared to the September estimates were split evenly being either higher or lower.
While basis values are pulling back in areas where harvest has started, it is still higher than normal for this time of year. Given the large basis market inverse over the last 2 months, this isn’t surprising and validates that most commercial storage and end user facilities were empty as harvest began. This should mean a nice basis bump or futures rally once harvest is complete.
Beans
This week beans traded to their lowest level since mid-June but managed to trade off those lows by Friday’s close. At this point, export sales pace will need to increase to drive futures higher than $13. However, it seems likely harvest could keep prices range-bound between $12.50 to $13 for another few weeks.
Even as harvest has started in the western belt, the bean basis there has remained incredibly strong for this time of year. This is likely due to ocean freight rates out of the Pacific northwest to Asia being a better value than through the Gulf. If these ocean freight rates continue through winter, western states may see higher than normal basis levels after harvest too.
Want to read more by Jon Scheve? Check out recent articles:
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No, Oats Do NOT Know & Lumber Prices Have No Bearing On Grain Values
Seasonal Pull Back In Prices as Harvest Approaches, But Will It Last?
Corn And Bean Prices Can Potentially Rally Going Forward
The Spread Between Posted Bids And Prices End Users are Willing To Pay Could Be More Than 60 Cents
How I Save Time And Money By Hiring Commercial Trucks To Haul Grain Off My Farm
Why Inverse Markets Mean Farmers Should Sell Their Grain Now and Not Later
Jon Scheve
Superior Feed Ingredients, LLC
jon@superiorfeed.com
