Harvest rolls on in the U.S.  Focus has shifted from soybeans to corn in this part of the country.  After record breaking bean yields most producers are happily surprised with what could prove to be record corn yields as well.  Local elevators, already bursting at the seems following the huge bean harvest, are now faced with the prospect of a huge corn crop overfilling what little space remains available.  Mountains of yellow are sure to be dotting the landscape in the coming weeks, covering seemingly every available grassy patch.

As a result of ongoing corn harvest and an extended open stretch of weather, corn futures traded lower for the week.  A general lack of demand along with the big crop has had corn on the defensive.  Soybeans, not ready to give up the lime light just yet, had a strong showing in the futures market.  When the USDA returned to work after the long weekend, export inspections were well above expectations.  This, along with additional sales announced daily, was enough to provide a big rally on Tuesday, pushing November beans above the $9.00 mark.

As the week wore on, exports lost their luster as big yields continue to weigh on the market.  For the week, soybeans were able to hold some of the gains, however, November futures were unable to close above $9.00.

Local basis has held surprisingly steady through harvest pressure.  Trucks keep rolling, but producer sales are still light.  Until the commercial elevator fills allocated space and forces sales, basis should hold fairly constant.  End users are getting their fill now, but general consensus says that once harvest is done, producers will lock the bin doors for a while.  Look for potential basis opportunity at that time.

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CHS – Rochester Grain Team
Kasson: 507-634-7545 ext 7
Ostrander: 507-657-2234

With harvest in full swing throughout the country, one would think markets would be very quiet.  And for most of the week, futures trade was just that, quiet.  Corn tried to trade higher to begin the week, eventually stalling as the December contract neared $4.00.  Resistance in soybeans remained near the $9.00 mark.  With more concrete yield results in soybean rolling in, it is a wonder we have been able to hold as strong as we have.  Most reports in Southern Minnesota have soybeans averaging between 60 to 70 bushels per acre, well above average.  Corn yields are still too early to project with confidence, however, early reports are above average.

The latest round of USDA Crop Production and Supply & Demand reports were released to end the week.  Trade expectations had bean yields increasing and corn yields staying unchanged.  The Feds agreed, only partially.  Bean yields were increased 0.1 to 47.20 bpa while corn yields surprised at 168.0 up 0.5.  The biggest surprise of all was in harvested bean acres, down 1.1 million.  Reaction was initially lower for both corn and beans due to higher yields, but the reduction in acres and corresponding drop in production eventually pushed beans higher.  Corn was not so lucky, closing lower on the day.

In the thick of harvest, basis levels are slowly getting worse as storage space fills at the processor and local elevator both.  This serves to encourage the elevator and producer to carry grain for a later date.  However, it also serves to push more grain to open storage or warehouse storage, limiting ownership.  A lack of ownership at the end-user level will ultimately start putting a floor under basis.  Bottom line, the freefall will likely be short lived.

Read Full Market Update

CHS – Rochester Grain Team
Kasson: 507-634-7545 ext 7
Ostrander: 507-657-2234