September 28, 2021
Good morning,
We saw a nice bump in the markets yesterday, but unfortunately there was not much to fuel that rally which has led to the markets trading lower this morning. Corn is currently down 3 and soybeans are down 6. We are in the time of year where the traders will continue to see yield reports on the high and low end and trade based on their bias. I would expect the markets to remain choppy all thru harvest as data continues to come in. Generally, yields are coming in less impressive in IL/IN but better in IA.
Harvest progress was reported at 18% complete last night compared to 10% last week and 15% for the 5-year average. Old crop basis levels continue their decline as processors are seeing new corn. We have seen Midwest basis levels drop 10-50 cents in the last two days depending on your market area.
We will have the USDA stocks report out on Thursday with the average guesses for September 1 2021, corn carryout at 1.167 billion bushel. Soybeans are projected at 172 million bushels while wheat is projected at 1.857 billion bushels. My thought is that regardless of how low corn and bean stocks are on Thursday’s report, we will not see much of a market reaction due to harvest pressure.
Have a Safe Day!
Garry Gard
920-348-6844
September 21, 2021
Good morning,
Corn and soybeans are continuing their selloff this morning with corn down 8 and soybeans off 4. Carryover from yesterday’s Stock collapse after the news of Evergrande’s collapse is one of the factors moving things lower. China’s central bank is expected to add additional liquidity to the market and no one really knows exactly what they plan to do with Evergrande Group. The company is massive, with a value equal to about 2% of the GDP in China. The Autumn Festival Holiday ends today. Real estate is the primary investment method in China where there is a massive amount of cash paid into these homes. It’s not like the US where lenders typically require 20% down on investment, China pays much, much more of the total equity. Investors own multiple homes similar to where US investors may own stocks.
National corn and soybean condition ratings each rebounded by a point this week, to 59% and 58% good/excellent, respectively; the former remains below 61% last year and the 64% five-year average, with the latter below 63% LY and the 64% 5YA. Corn harvest moved from 4% to 10% this week, up from 8% LY and the 9% 5YA pace, with corn maturity up from 37% to 57%, above 56% LY and the 47% 5YA. 58% of soybean had dropped leaves as of Sunday night, up 20 points on the week and above 56% LY and the 48% 5YA; harvest of that crop was initially reported 6%, basically even with 5% LY and the 6% average pace. Winter wheat planting rose from 12% to 21%, ahead of 19% LY and the 18% 5YA, with emergence initially reported at 3% done, basically even with 3% LY and the 2% five-year average pace.
There are a few storms moving through the Central US this morning. We are seeing light rain in Western Chicago. Rain is going to hang around the Eastern US for the next week, where the West will primarily be dry. Hard wheat is getting planted out West with no rain in the forecast to help early development.
Have a Safe Day!
Garry Gard
920-348-6844
September 20, 2021
Good morning,
Weaker markets to start the week as corn is down 6 and soybeans are down 18.
Property developer Evergrande Group in China missed its debt payment and is in default. Shares of the company are down to a couple dollars from values of 15 dollars a year ago. This highly leveraged property company was making news late last week with the amount of debt that they owe. Some close to the company say the firm owes more than 52 billion dollars this year. The question has risen, is Evergrande Group too big to fail? The sheer scale of Evergrande’s debt burden also contributes to the low likelihood of a bailout. Standing in excess of $300 billion, Evergrande’s liabilities exceed Huarong’s total liabilities of 238 billion. By bailing out its most bloated property developer right now, Beijing would shoot itself in one foot to save the other. A $300 billion bailout would just transfer the liability to the government and worsen the government’s preexisting debt hangover. US Stocks are liquidating on the news falling sharply early this morning.
There is a significant change to wetter in Brazil in both the short range forecast and the long range this morning. A pattern change was hinted at starting at the beginning of last week and today it is much wetter. The forecast from September 28th through October 6th has substantial rains coming into the driest areas of Brazil. This looks to be the beginning of the rainy season.
Most markets are down on the news out of China this morning. We’ll see how Stocks and Energy handle the break this morning. Crop yields will be rolling in this week and so far, they are varying greatly with record yields and disappointing yields reported. I recommended selling on the rally last week, if you needed to unload anything at harvest. There are quick ship premiums that can be had, but will soon diminish. Take advantage of $5+ prices to lock in margin for fall and beyond. There are few guarantees in life and high grain prices are not one of them.
Have a Safe Day!
Garry Gard
920-348-6844
September 16, 2021
Good morning,
Corn opened the day 4 lower and soybeans are unchanged.
The energy market put the brakes on the rally last night led by natural gas, which is 200 lower this morning. These markets sometimes effect the way prices trade at the CBOT and CME. Energy has been helping the CBOT rally but is also in the process of putting in a high. This has created a bounce in corn and soybeans here at the beginning of harvest as beans are back over $13 and corn is around $5.30. If you need to sell something, this is an opportunity. The markets tend to sag at the end of the week in harvest when rallying early in the week.
Export sales were 246,600 mt of corn and 1,264,200 mt of beans. Corn sales were on the slow side, where beans were strong and better than expected. Next week may show the slowdown from the lack of offers at the Gulf. The U.S. Department of Agriculture confirmed cancellations of 132,000 tons of U.S. soybeans sold to China and another 196,000 tons sold to unknown destinations, all for delivery in the 2021/22 marketing year that began Sept. 1.
China reportedly bought four to six cargoes of Brazilian soybeans (up to 360k tons) earlier this week for Oct-Nov delivery, an uncommon time frame for the purchases but likely due to the export outages in the U.S. Gulf as of late. Freight rates for shipping are at the highs of the year due to the big bump in energy prices. Foreign buyers do not know what to do as they want to buy the cheaper US corn, beans, and wheat as premiums in the basis market have dropped along with price.
The 10-day forecast is similar to yesterday where moderate rains are expected to fall somewhere between the Dakota’s and Minnesota. The rest of the Midwest is mostly dry in the 10-day outlook and the 10-15. Temps warm up out West for a few days and then subside to the South into Texas. The back end of the model has turned to cooler this morning after the 90’s move out at the beginning of next week.
Have a Safe Day!
Garry Gard
920-348-6844
September 13, 2021
Good morning,
Weaker markets to start the week with corn and soybeans down 9 and 5 respectively this morning.
After Fridays report the markets surprisingly closed 7 higher despite bearish news in the report. On Friday the USDA raised the corn yield from 174.6 bu/acre to 176.3. Carryout was increased from 1.242 billion bushels to 1.408. Bean yield increased from 50 bu/acre to 50.6 and carryout was raised from 160 to 185 million bushels. The acres change that many in the trade thought would be up substantially, was only increased 600,000 in corn and lowered 400,000 in beans.
Another Tropical storm is headed into the Gulf and this one is called Nicholas. The storm is supposed to make landfall in Texas late today. Sixty mile per hour winds and rains of up to 8 inches are forecast. Louisiana could see 2-4 inches, which may slow progress on getting the power grid back to normal. So far 3 of the US export facilities are operational in the Gulf. A high-pressure ridge has set up out West and will keep most precipitation limited to the East and far North. Dry conditions will move the crop along and we should see harvest pick up later this week.
Have a Safe Day!
Garry Gard
920-348-6844
