Missed a recent article by Jon Scheve? Get it sent to you directly every week. Send a request by email: jon@superiorfeed.com
Market Commentary for 9/3/21
This week’s price pull back is partly due to concern with the damage Gulf export facilities have suffered in the New Orleans area. One elevator will likely be down for 6 months, but the remaining 7 or 8 facilities will hopefully be operational as soon as power is restored, and minor damage is repaired. While there may be some missed export opportunities in the short-term, it is still early in the exporting season. If most of the facilities are up and running by middle or late September, there should be minimal impact.
Some market participants believe planted corn acres for the 2021 crop will be increased in the September report. Others think the national yield average will improve at least one bushel per acre from the August report. If both turn out to be true, it could mean 250 million more bushels of carryout for the 2021 crop which would be bearish prices from current levels.
While there has been a lot of bearish news this week, it is important to remember that it is common for markets to pull back in September as harvest approaches. Based on historical trends of the last 15 years, a 50-cent price pullback to levels just under $5, would not be out of the question considering the time of year.
It finally started to rain over the last 2 weeks in the northern corn belt, but it might be too late to provide any real benefit to the fall crops there. With daylight shrinking, beans are nearing their end-of-life cycle and corn was already in the final stages.
In 4 of the last 6 years, bean futures values at the end of September were similar to levels at the beginning of September. In the other 2 years, the market finished higher by the end of the month. While there’s no guarantee that beans won’t pull back over the next few weeks, its possible bean prices are near a seasonal low. Ultimately, with 60% of the world’s beans produced in the southern hemisphere, South American weather during their upcoming growing season should be the biggest driver of bean prices later this year.
Want to read more by Jon Scheve? Check out recent articles:
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
Basis & Spread Trades Can Add to Your Bottom Line
Can Beans Rally Back Above $15 Or Are We Headed For $10?
Jon Scheve
Superior Feed Ingredients, LLC
jon@superiorfeed.com
