Yesterday’s rally in corn and soybeans was a pleasant surprise fueled by rumors that Argentina may increase its export tax to 33%.(up from 25%) Rumors that China bought up to 15 cargos of Argentine beans that are a replacement of soybeans they sold to China. If Argentine commercials re-export the products, then the country’s taxation scheme would not be applicable on those products. This would mean that any beans that Argentina buys from the US and sells to China would avoid this taxation. (More bean exports for the UW) Brazil appears to be making the same plans as they buy 1.0 mmt of US soybeans. While this may help grain prices for a bit, the US farmer needs a resolution between the Chinese government and US government to eliminate the tariffs that are in place or going to be in place. Until this happens traders will be cautious to be long any commodity.
Reports of yields all over the board continue to roll in from the south on corn and soybeans. The majority continue to be higher than last years levels. Elevators in central IL are hoping for some rain this weekend or early next week to help slow down the harvest pace as they are running into space issues. I have talked to several elevators that said the speed, dryness and size of this years corn and bean crop is putting a lot of pressure on them early in harvest that they are struggling to handle. If this in any indication for the things to come in WI, I would advise producers to make sure you have a game plan! Here are some tips to help avoid harvest issues:
1. Fill elevator/end user contracts first. Don’t wait until your bins are full. If you deliver the first grain harvested you can usually avoid the big harvest rush.
2. Make sure you have enough sales made. Some locations may not be taking new contracts or spot bushels when you run out of room at home. If you don’t like the cash price, make a basis contract. Basis levels are the widest when you and everyone else is looking for a place to deliver.
3. Talk with your elevator/end user to make sure you are in agreement on what contracts you have and what delivery time you have on them.
4. Plan ahead. Make sure you know the hours of receiving. If you are delivering to Didion, YOU MUST SCHEDULE YOUR DELIVERIES! We are still buying and taking spot loads, but the delivery date of these must be scheduled. Call Mitch or Garry to schedule when you would like to deliver.
Have a Great Weekend!