December 7, 2022
Good morning,
Corn is showing a small bounce this morning after the recent selloff. Currently corn is up 5 while soybeans and wheat are up 6 and 22 respectively.
The lack of export business has been weighing on the markets and will continue to do so well into the spring and summer months unless there are weather issues in South America.
Brazil exported a record 6 million tons of corn in November, bringing the year-to-date total to 38 million tons, almost twice as much as the 20.6 million tons shipped in 2021. Brazil is expected to harvest a record 126 million tons of corn, according to the USDA.
Four vessels loaded with Brazilian corn are currently in route to China and five more should sail to China soon, according to the shipping agency Alphamar Agencia Maritima. Additional vessels waiting to load may also head there, pushing total Brazilian corn shipments to China past 1 million tons for the year. Historically an importer of American and Ukrainian corn, China’s appetite for cheaper and abundant Brazilian supplies are taking a toll on US sales. Export inspections of American corn of 6.3 million tons are down 33% so far this year, pressured by a dry Mississippi River that is raising logistics costs and helping to keep supplies too expensive for importers.
Producers should take advantage of todays bounce to make any additional 2022 sales they have to make. We are stuck in a 40-50 cent window and trying to pick the high is going to be tough. I would advise making small sales thruought the winter to keep bins cored and cash flowing. New crop sales for 2023 should not be forgotten and putting some sales on at current levels is not a bad idea.
Have a Safe Day!
Garry Gard
920-348-6844
December 2, 2022
Good morning,
Corn and wheat markets are down this morning on news out of Russia! Corn is currently down 12, wheat is down 24 and soybeans are up 6.
Russian President Vladimir Putin is “open to negotiations” on Ukraine but the West must accept Moscow’s demands, the Kremlin said on Friday, a day after U.S. President Joe Biden said he was willing to talk if Putin were looking for a way to end the war. This is what has corn and wheat futures down this morning with a potential end of the conflict in the Ukraine. I am not buying the rumor this morning as we’ve seen enough out of the Kremlin to have no idea what the end game would actually look like, but it is one of the first signs of hope that we have seen.
The EPA announced the RVO biofuel mandates for 2023,2024, and 2025 at 22.68 billion gallons. RVO’s were expected to be higher and bean oil is down sharply by 300 points. The EPA set corn ethanol at 15.0 billion gallons for 2023, and 15.25 gallons for 2024 and 2025. This flat increase tells of a mature industry where the EPA is looking for no growth.
Corn, soybeans and wheat are showing the characteristics of a bad market. The EPA’s lack of changes would not have caused this kind of violent reaction in the markets a year ago, but here we are. The Fed is going to raise interest rates another .5% sometime next week, which certainly won’t help matters. We are always in changing times; this era is going to be defined by higher interest and the cost of money.
Have a Safe Day!
Garry Gard
920-348-6844
November 29, 2022
Good morning,
Markets are quiet this morning with corn down 1 and soybeans up 1.
The announcement yesterday that OPEC would cut production put a reversal in for crude oil. This also sparked a rally in bean oil, pulling beans and meal higher with it. Corn and wheat stayed down as the December roll and first notice day is Wednesday. Even with the selling, corn futures have been largely unaffected in price. Dec corn futures have been trading between 6.50 to 6.70 for the past two weeks. We could see a bounce in the corn and wheat markets after first notice day, but I don’t expect much at this point.
Private analysts AgRural reported ‘22/23 Brazilian soy planting at 87% complete, slightly behind last year with center-west dryness hampering fieldwork. Summer corn planting reached 88%, down from 93% at this point last season.
US Crop progress report was delayed until this afternoon due to technical issues at the agency. This will be the last progress report until they resume in early April.
Have a Safe Day!
Garry Gard
920-348-6844
November 28, 2022
Good morning,
Corn is down 4 and soybeans are up 7 to start the week.
The Funds are in control of the market, and they have been liquidating corn and bean while added to short wheat. The wheat position is up to 75,000 short the largest in a couple years. There is not much bullish here this morning with regular rains in the early season of South American weather. The Funds have shown little interest in commodities as of late, which looks a lot different than this time last year. Interest rates and the high dollar do not much for a very good market.
Protest have erupted in China due to the lock down of cities. The zero-tolerance policy is hitting a breaking point with the Chinese people as they hit the streets. Public protests are very risky and rare within China, due to the government’s ability to use surveillance video to identify participants. Yet, public unrest has reached the boiling point in some locations. Many Chinese still support President Xi Jinping’s dynamic-zero policy, believing that it is the best way to protect China’s aging population, but those who do not support it are becoming more vocal.
There is nothing bullish in the marketplace right now and most likely won’t be for the remainder of the year unless things escalate between Russia and Ukraine again. Basis levels remain historically firm, but board prices appear to be headed nowhere. Take advantage of current levels to make some winter bin coring sales.
Have a Safe Day.
Garry Gard
920-348-6844
November 25, 2022
Good morning,
Markets are slightly higher to open the day with corn and soybeans both trading 4 higher.
Strength this morning is coming from a stronger weekly export report along with lighter trade with many taking an extended holiday weekend. Weekly exports came in at 72.8 million bushels which is on the low end of trade estimates, but the largest we have had since last spring.
Now is the time that producers should be planning their sales for December bin coring and putting in firm offers for sales in Q1 to keep grain flow and monitor quality. This years crop was good, but not as good as last year and monitoring your bins is critical. With exports significantly behind last year and the pace needed to meet USDA projections, this market is not going to run higher anytime soon.
I look for lighter trade today with the markets closing at 12:05am.
Have a Safe Day!
Garry Gard
920-348-6844
