Slightly higher markets overnight with both corn and soybeans up 2.
The annual US soy exporters conference wrapped up yesterday without any known sales to Chinese buyers which is a sharp contrast to previous years where billions of dollars worth of soybeans have been signed over to China. The US China trade dispute has obviously had a huge impact on soy product prices, but things will get even worse in the coming months with no export demand and a record harvest on tap.
Canada has returned to the table to discuss a NAFTA 2.0 with the US. The Canadian delegation says that an agreement is possible by Friday, but is doubtful it will happen that quickly. With the US securing a deal with the EU, Mexico and possibly Canada there appears to be building pressure for China to become more agreeable on a trade deal. (don’t expect anything soon)
Producers that do not have storage or are going to be short of storage this fall should be looking to lock up space quickly. In my opinion there are a few things are going to contribute to this falls space shortage.
1. Wheat still being stored in commercial elevators due to toxin issues this past summer that kept them from shipping the 2018 crop.
2. Record soybean production due to acres and great growing conditions will fill a lot of corn space.
3. Lack of soybean exports forcing commercials to sit on soybeans.
4. Carryout of corn and soybeans from the 2017 crop that is still in commercial and producer bins.
5. Average or better than average US 2018 corn crop that will be the last one to the table looking for space.
I would advise making cash sales or basis sales for any bushels that you will have to move this fall. Not only do I expect space to be short, I also anticipate basis levels widening in the coming weeks.
Have a Safe Day!