Weakness in the markets yesterday as rains passed through Iowa, Illinois and Indiana with total rainfall much better than the models had predicted. The markets have opened lower this morning with corn down 1 and wheat down 3.
Prices are usually at their lowest of the season in corn and wheat going into the end of August. All the storage and dp contracts for corn and beans go off at the end of the month. The 31st of August, many times has marked the low price period for the year. The threat of an early frost or subpar yields appear to be the biggest thing producers are holding on to help move prices higher. Unfortunately basing your marketing on these two items may not be beneficial. End users have enough on the books for the first quarter, and there is no rush to further book grain. Prices also have a habit of holding back until crop insurance prices are set in October.
The Pro Farmer corn yields for Indian were 161.5 BPA, compared to 166 by NASS. Indiana soybean pod counts were 924 vs 1,312 last year. Nebraska corn yield was 172.5 vs NASS of 186. Nebraska pod counts were 1,210 vs 1,299 last year. We’ve thought that beans will be down in yield between 20 and 40 percent on most farms with short beans, late development and low pod counts.
Yesterday morning POET, the nations largest ethanol producer, announced that they will be making some operational changes due to market conditions.
1. POET Bio-refining – Cloverdale will idle production indefinitely.
2. Half of POET bio-refineries will run at reduced production rates
We have had reports of many other plants slowing or closing down due to poor
I would advise producers that are sitting on old bushels that need to move before harvest to lock in basis very soon. Once the calendar turns to September the gates will open regardless of cash prices as most producers and elevators will empty out their remaining stock to make room for this years crop. Producers needing to make new crop sales should consider making fall basis sales vs. the CH to give them a little more time to market once the crop is in the bin.
Have a Safe Day!