Corn, soy struggle for beneficial properties amid advancing harvest charges
- Corn blended
- Soybeans up 1-5 cents; Soymeal up $1.60/ton; Soyoil up $0.42/lb
- Chicago & Kansas Metropolis wheat up 4-6 cents; Minneapolis wheat up 7-8 cents
*Costs as of 6:50am CDT.
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Outdated crop corn futures rose $0.01-$0.03/bushel this morning by new crop futures edged $0.01-$0.02/bushel decrease on rising previous crop provide prospects. To make certain, beneficial properties for previous crop corn futures had been capped by speedy harvest charges and higher than anticipated yield and manufacturing forecasts.
Weekly ethanol manufacturing knowledge launched by the U.S. Power Info Administration (EIA) at present noticed weekly output charges rise 7% to 41.1 million gallons/day of manufacturing for the week ending October 1. It was the biggest weekly manufacturing studying for the corn-derived gasoline additive since early August.
An enormous contributor to enhancing weekly ethanol output figures is a return to pre-pandemic shopper gasoline demand ranges over the previous couple weeks. Gasoline consumption has risen 5.6% over the previous 5 weeks because the world slowly returns to pre-pandemic actions.
Smaller ethanol stockpiles final week had been additionally an encouraging omen for the corn sector. Weekly inventory volumes fell 1% on the week to 837 million gallons as of October 1. It factors to rising mixing charges by refiners.
It’s encouraging information for the ethanol sector and corn farmers alike. Corn consumption for ethanol closed the 2020/21 advertising and marketing 12 months 6% decrease than the pre-pandemic interval of 2018/19. If the business is mounting a comeback, corn costs will possible reward the enlargement.
We’re already seeing indicators of that phenomenon. Foundation choices at Midwestern ethanol crops are considerably extra favorable than money bids from different markets, particularly export terminals and elevators. For growers trying to promote bushels off the mix, ethanol patrons may current probably the most worthwhile alternatives for producers this fall.
Soybean futures costs traded $0.01-$0.05/bushel greater this morning, with discount patrons leaping again into the markets after yesterday’s decrease shut. Positive aspects had been capped by quick harvest progress. Decrease crude oil costs took among the wind out of soyoil’s sails, although December futures nonetheless traded $0.42/lb greater this morning on tight international edible oil provides.
Final week’s Quarterly Shares report from USDA had some stark implications for U.S. soy growers. I’m going into what which means for corn and soybean producers in my newest E-corn-omics column, posted on our web site now. Listed below are a couple of insights I gleaned for soy producers as a preview.
There’s little doubt the 2020/21 advertising and marketing 12 months was an anomaly for soybean utilization charges. First quarter consumption of 1.8 billion bushels accounted for 40% of whole 2020/21 utilization whereas second quarter consumption totaled 1.4 billion bushels, or 31% of annual consumption. Respectively, the prior six-year common for first and second quarter soybean consumption stands at 35% and 27%.
So it ought to come as little shock that third (18%) and fourth (11%) quarter consumption charges had been so low. Outdated crop costs peaked in July. With Chinese language demand targeting South America, U.S. soy processers had been unwilling to pay for the 1.56 billion bushels of soybeans left within the U.S. as of March 1, 2021, with many extending upkeep initiatives to safeguard towards greater soy enter costs.
The decrease soybean consumption charge over the previous six months grew 2020/21 provides previous what was beforehand believed traditionally tight measures. To make certain, soy shares are prone to stay tight once more this 12 months, however to not the diploma of 2020.
November 2021 soybean futures costs have dropped over $0.33/bushel since final Thursday. New crop November 2022 futures are down $0.09/bushel in the identical time interval. Prospects for each crops stay comfortably above breakeven ranges for most growers throughout the Heartland.
However the drop, paired with rising concern over China’s export demand prospects within the coming weeks, coaxed the market to purchase 2022 corn acres for the primary time since mid-July 2021.
However farmers shouldn’t be too fast to regulate crop rotations simply but. The market doesn’t voice a powerful demand for corn till the brand new crop soybean-corn worth ratio dips under 2.3. At market shut final Thursday, that determine stood at 2.38 and is sitting at 2.35 at present, hovering near the two.4 benchmark inflection level for corn versus bean acres.
That implies that the market is just not overly keen to purchase both corn or soybeans, although a slight desire for corn has surfaced over the previous week. To make certain, plenty of time stays till the 2022 crop will probably be planted, particularly when 2021 crops are nonetheless awaiting harvest.
Hovering enter prices will play a big consider subsequent 12 months’s acreage allocations, particularly as cries for product availability for subsequent spring’s fertilizers and pesticides are already being loudly voiced amid ongoing logistic disruptions within the provide chain.
Regardless of Ukraine’s upward wheat exports revision issued yesterday, tight exportable provides within the Black Sea continues to push Chicago wheat costs greater within the in a single day markets. Tender wheat exports out of the European Union have been greater in comparison with final 12 months, pointing to ravenous international demand for wheat.
A weaker greenback additionally propped up beneficial properties within the wheat complicated this morning. Chicago and Kansas Metropolis futures rose $0.05-$0.06/bushel on the feelings whereas Minneapolis futures tick up $0.07-$0.08/bushel.
Worldwide demand for wheat stays sturdy, with Egypt accepting presents from Russia and Ukraine on a young for 8.8 million bushels yesterday. Whereas the U.S. was not a purchaser, it’s nonetheless in prime place for export alternatives subsequent spring.
Wheat crop shortfalls within the Northern Hemisphere this summer time may create alternatives for residual suppliers just like the U.S., but in addition lesser-known gamers on the worldwide market. India is one such participant.
A number of business sources recommend that India’s 2021/22 wheat exports are prone to enhance four-fold to between 154 million – 162 million bushels as rising freight prices make Indian wheat an inexpensive choice to ship to different clients in Asia. In distinction, delivery charges from Russia or Ukraine to Asia are at present $0.27-$0.41/bushel dearer than Indian vendor’s freight quotes.
India is the world’s second largest wheat producer and the tenth-largest wheat exporter. The Asian nation is at present working via record-high 2020/21 ending shares of 1.02 billion bushels. 2021/22 ending shares are forecasted at one other bin-busting 1.06 billion bushels.
USDA projected 2021/22 Indian wheat exports at 129 million bushels. However the shift in freight costs may ship these forecasts greater in subsequent week’s WASDE report.
Rain showers will blanket a lot of the Nice Lakes and Jap Corn Belt areas at present, in response to NOAA’s short-range forecasts. The system will slowly transfer additional north into the Nice Lakes area tomorrow.
As much as an inch of accumulation is predicted in Illinois and Southern Wisconsin over the following 24 hours, possible slowing harvest progress within the area. A storm system growing within the Central Rockies is prone to shift into the Northern Plains and Higher Midwest by Saturday.
Coronavirus circumstances within the U.S. rose to 44,060,356 circumstances as of this morning in response to the Johns Hopkins Coronavirus Resource Center. The demise toll elevated to 707,797 deaths as of press time because the pandemic continues to deal devastating blows to people unvaccinated towards the virus.
In response to the CDC, almost 78% of U.S. adults have acquired at the very least one COVID-19 vaccine as office mandates assist increase immunity charges. Over 186 million Individuals (56%) are absolutely vaccinated. Over 6.3 billion vaccine doses have been administered worldwide.
“Shoes just keep dropping in the fertilizer market this fall — and it’s farmers who could wind up barefoot after paying nutrient bills,” Farm Futures contributing analyst Bryce Knorr foreshadows. Knorr notes that the newest enhance in anhydrous ammonia may squeeze $0.35/bushel out of 2022 revenue margins.
Hovering pure fuel costs are a key perpetrator behind rising fertilizer prices. Hurricane Ida not solely shut down export terminals within the Gulf, nevertheless it additionally knocked out gasoline to ammonia crops as manufacturing was scheduled to ramp up.
Within the newest Ag Marketing IQ column, Knorr dives deep into the provision chain complications dealing with the fertilizer business as fall software season ramps up. Knorr additionally presents hedging methods for growers trying to salvage 2022 working margins.
“Winter weather in the northern hemisphere is another wild card, if the current La Nina or potential Polar Vortex fuel increased heating demand that gives natural gas markets more heartburn,” Knorr cautions.
Not coincidentally, USDA’s Advertising Information Service division in Illinois will launch up to date retailer worth choices for fertilizer at present. Seasonal demand – in addition to the aforementioned components talked about in Knorr’s latest column – will very possible proceed to maintain fertilizer costs on the upswing.
Excessive commodity costs, provide chain points, and inflationary pressures pushed meals costs across the globe greater for a second straight month, in response to the United Nation’s Meals and Agricultural Group (FAO). Rising vegetable oil and cereal grain costs are the chief contributors to the uptick in meals costs.
FAO additionally added 12 million tonnes of worldwide grain cereal manufacturing to its 2021 forecasts, bringing it to a brand new report excessive quantity of two.8 billion tonnes. However regardless of the upward revision, the company nonetheless expects the 2021 haul to fall wanting assembly international demand over the approaching 12 months.
Optimism abounded on Wall Avenue this morning as markets rejoiced that Senate Republicans had been prepared to have interaction in bipartisan negotiations to lift the debt ceiling till December, permitting the U.S. to proceed paying its debt obligations and stopping a complete financial collapse.
Russia additionally indicated it could enhance oil shipments to the European Union, staving off a possible vitality provide crunch. Power futures drifted decrease on the information. S&P 500 futures rose 1% to $4,397.50 on the feelings.
|Morning Ag Commodity Costs – 10/7/2021|
|Contract||Models||Excessive||Low||Final||Web Change||% Change|
|DEC ’21 CORN||$ / BSH||5.3525||5.3125||5.3475||0.025||0.47%|
|MAR ’22 CORN||$ / BSH||5.44||5.4||5.4325||0.0225||0.42%|
|MAY ’22 CORN||$ / BSH||5.49||5.45||5.485||0.0225||0.41%|
|JUL ’22 CORN||$ / BSH||5.49||5.45||5.485||0.0175||0.32%|
|SEP ’22 CORN||$ / BSH||5.31||5.2725||5.3075||-0.0025||-0.05%|
|DEC ’22 CORN||$ / BSH||5.2825||5.25||5.2775||-0.0025||-0.05%|
|MAR ’23 CORN||$ / BSH||5.335||5.3125||5.32||-0.02||-0.37%|
|NOV ’21 SOYBEANS||$ / BSH||12.4675||12.405||12.46||0.04||0.32%|
|JAN ’22 SOYBEANS||$ / BSH||12.5725||12.5125||12.5675||0.0425||0.34%|
|MAR ’22 SOYBEANS||$ / BSH||12.66||12.5975||12.655||0.0425||0.34%|
|MAY ’22 SOYBEANS||$ / BSH||12.7575||12.7||12.755||0.045||0.35%|
|JUL ’22 SOYBEANS||$ / BSH||12.8125||12.755||12.81||0.0425||0.33%|
|AUG ’22 SOYBEANS||$ / BSH||12.72||12.72||12.72||-0.0125||-0.10%|
|SEP ’22 SOYBEANS||$ / BSH||12.5825||#N/A||12.5375||0||0.00%|
|NOV ’22 SOYBEANS||$ / BSH||12.495||12.44||12.49||0.04||0.32%|
|JAN ’23 SOYBEANS||$ / BSH||12.4725||12.4725||12.4725||0.0075||0.06%|
|OCT ’21 SOYBEAN OIL||$ / LB||52||#N/A||60.07||0||0.00%|
|DEC ’21 SOYBEAN OIL||$ / LB||60.91||59.82||60.67||0.33||0.55%|
|OCT ’21 SOY MEAL||$ / TON||321.6||321.6||321.6||0||0.00%|
|DEC ’21 SOY MEAL||$ / TON||324.9||322.1||324.1||1.4||0.43%|
|JAN ’22 SOY MEAL||$ / TON||326.7||324.1||326||1.4||0.43%|
|MAR ’22 SOY MEAL||$ / TON||330.2||327.6||329.5||1.3||0.40%|
|MAY ’22 SOY MEAL||$ / TON||334.5||331.9||333.9||1.4||0.42%|
|DEC ’21 Chicago SRW||$ / BSH||7.5225||7.44||7.52||0.06||0.80%|
|MAR ’22 Chicago SRW||$ / BSH||7.6475||7.57||7.6475||0.0575||0.76%|
|MAY ’22 Chicago SRW||$ / BSH||7.675||7.605||7.675||0.055||0.72%|
|JUL ’22 Chicago SRW||$ / BSH||7.495||7.43||7.495||0.035||0.47%|
|SEP ’22 Chicago SRW||$ / BSH||7.5025||7.4425||7.5025||0.0275||0.37%|
|DEC ’21 Kansas Metropolis HRW||$ / BSH||7.51||7.43||7.505||0.055||0.74%|
|MAR ’22 Kansas Metropolis HRW||$ / BSH||7.585||7.51||7.585||0.0575||0.76%|
|MAY ’22 Kansas Metropolis HRW||$ / BSH||7.6125||7.5425||7.6125||0.0575||0.76%|
|JUL ’22 Kansas Metropolis HRW||$ / BSH||7.49||7.4425||7.49||0.0225||0.30%|
|SEP ’22 Kansas Metropolis HRW||$ / BSH||7.4925||7.475||7.4925||0.0025||0.03%|
|DEC ’21 MLPS Spring Wheat||$ / BSH||9.475||9.375||9.4675||0.0775||0.83%|
|MAR ’22 MLPS Spring Wheat||$ / BSH||9.36||9.265||9.36||0.0825||0.89%|
|MAY ’22 MLPS Spring Wheat||$ / BSH||9.1425||9.1425||9.1425||0.0075||0.08%|
|JUL ’22 MLPS Spring Wheat||$ / BSH||9.015||8.96||9.015||0.045||0.50%|
|SEP ’22 MLPS Spring Wheat||$ / BSH||8.2475||8.205||8.2475||0.0375||0.46%|
|DEC ’21 ICE Greenback Index||$||94.29||94.085||94.115||-0.157||-0.17%|
|NO ’21 Mild Crude||$ / BBL||77.23||74.96||76.37||-1.06||-1.37%|
|DE ’21 Mild Crude||$ / BBL||76.91||74.67||76.02||-1.04||-1.35%|
|NOV ’21 ULS Diesel||$ /U GAL||2.4486||2.3735||2.412||-0.03||-1.23%|
|DEC ’21 ULS Diesel||$ /U GAL||2.441||2.3678||2.405||-0.0296||-1.22%|
|NOV ’21 Gasoline||$ /U GAL||2.3142||2.252||2.2899||-0.0183||-0.79%|
|DEC ’21 Gasoline||$ /U GAL||2.2664||2.2073||2.2424||-0.0198||-0.88%|
|OCT ’21 Feeder Cattle||$ / CWT||0||#N/A||156.8||0||0.00%|
|NOV ’21 Feeder Cattle||$ / CWT||0||#N/A||158.125||0||0.00%|
|OC ’21 Reside Cattle||$ / CWT||0||#N/A||123.825||0||0.00%|
|DE ’21 Reside Cattle||$ / CWT||0||#N/A||128.225||0||0.00%|
|OCT ’21 Reside Hogs||$ / CWT||0||#N/A||89.625||0||0.00%|
|DEC ’21 Reside Hogs||$ / CWT||0||#N/A||81.725||0||0.00%|
|OCT ’21 Class III Milk||$ / CWT||18.04||18.04||18.04||-0.11||-0.61%|
|NOV ’21 Class III Milk||$ / CWT||18.63||18.57||18.63||0.04||0.22%|
|DEC ’21 Class III Milk||$ / CWT||18.19||18.19||18.19||0||0.00%|
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