Two Rivers Cooperative

TRC GRAIN COMMENTARY

• September 22, 2020

  Corn & beans struggled to keep the early morning rally intact despite continued export sales reported Another 530,000 metric tonnes of beans was reported sold to China and unknown this morning Another 460,000 metric tonnes of corn was reported sold in the daily USDA release China is at 10.2 mil. tonnes currently, much higher than the USDA’s estimate of 7 mil. for the year USDA may think China cancels corn purchases in the future or rolls them into the 2021/22 crop years Corn good/excellent ratings were improved 1% to 61% this week after good rains over the Midwest Soybean good/excellent ratings were held steady at 63% this week Soybean harvest sits at 6% & corn is at 8%, both slightly behind average likely due to recent Hurricane Argentina soymeal production is down 9% year over year.  They are expected to be down 9.5% in 2021 If this happens, 50% of their total soymeal production will be sitting idle next year Weather looks clear for rapid harvest activity this week and next!

• September 4, 2020

  Corn CBOT Prices Two Rivers Cash Bid Prices Sep ‘20 347’2 +2’6 Sep ‘20 318’0 +5’0 Dec ‘20 358’0 +4’2 NC ‘20 313’0 +3’0 Mar ‘21 368’4 +3’6 Dec ‘20 317’0 +4’0 May ‘21 374’6 +3’2 Jan ‘21 324’0 +5’0   Soybeans CBOT Prices Two Rivers Cash Bid Prices Sep ‘20 969’4 +0’6 Sep ‘20 908’0 +2’0 Nov ‘20 968’0 +2’0 NC ‘20 894’0 +1’0 Jan ‘21 973’4 +1’2 Dec ‘20 908’0 +2’0 Mar ‘21 973’6 +1’0 Jan ‘21 907’0 +2’0   Grains finished higher today to close out the week strong ahead of the long holiday weekend Corn is in an uncertain spot between lost production from drought and storms & lost ethanol demand In a year with typical driving habits, corn would be rallying more from perceived losses from drought The question remains over lost production/reduced harvested acres due to the derecho Brazilian corn production estimates will likely be revised higher in subsequent USDA monthly reports Strong profits and a currency that seems to only get weaker makes pushing for high yields the norm The unknown is China. Are they cleaning out old inventory or rebuilding supplies due to food inflation? The USDA announced today the sale of 318k metric tonnes to China The US remains at a price advantage vs Brazil into China through November Expect large purchases to continue as grains are cheap & China attempts to meet Phase 1 obligations Brazilian production is expected to increase in ‘21 as well with acreage expansion due to strong profits

• August 28, 2020

  Corn CBOT Prices Two Rivers Cash Bid Prices Sep ‘20 346’0 +1’6 Aug ‘20 321’0 +2’0 Dec ‘20 359’2 +0’6 Sep ‘20 312’0 +7’0 Mar ‘21 369’2 -0’2 NC ‘20 313’0 Unch. May ‘21 375’6 -0’2 Dec ‘20 318’0 Unch.   Soybeans CBOT Prices Two Rivers Cash Bid Prices Sep ‘20 950’4 +13’2 Aug ‘20 896’0 +9’0 Nov ‘20 950’4 +8’4 Sep ‘20 891’0 +9’0 Jan ‘21 956’2 +8’6 NC ‘20 874’0 +9’0 Mar ‘21 956’2 +8’6 Dec ‘20 890’0 +8’0   Grains continued their march higher today with more focus on weather issues and increased demand The leftover precip from Hurricane Laura that potentially could hit the Midwest didn’t materialize The focus remains on a crop that is shrinking in size, not growing.  That changed in a few short weeks With renewed demand from China for corn and beans, traders are trying to guess what imports will be China is buying corn multiple dollars cheaper per bushel than what their domestic price is currently They can essentially print money by importing corn from the US and sell it internally China also seems intent on at least trying to meet its obligations in the Phase 1 trade deal Technicals on the charts are also fueling the rally in commodities in a contra seasonal rally Funds are long beans and are approaching near even on corn positions, which is quite a feat in itself Trade next week will start to focus on early harvest results & further export demand

• August 27, 2020

  Corn CBOT Prices Two Rivers Cash Bid Prices Sep ‘20 340’6 +3’6 Aug ‘20 319’0 +3’0 Dec ‘20 354’4 +4’2 Sep ‘20 305’0 +7’0 Mar ‘21 366’2 +3’4 NC ‘20 313’0 +5’0 May ‘21 372’6 +3’4 Dec ‘20 318’0 +5’0   Soybeans CBOT Prices Two Rivers Cash Bid Prices Sep ‘20 913’6 +17’6 Aug ‘20 887’0 +3’0 Nov ‘20 920’2 +17’6 Sep ‘20 882’0 +3’0 Jan ‘21 927’2 +17’2 NC ‘20 865’0 +3’0 Mar ‘21 929’4 +15’4 Dec ‘20 882’0 +3’0   Corn and beans rallied today on continued heat and dryness as was forecasted Hurricane Laura earlier this week was thought to hit Iowa to bring moisture, but that has changed Laura is expected to move more east & miss Iowa, some minor moisture is expected for now Grains have rallied on technical buy signals and short covering due to weather and demand Export sales report this morning showed strong sales for corn, soybeans, wheat, soy oil, and cotton It’s pretty obvious China was the primary buyer last week because China is typically in those markets The USDA announced sales of 747k tons of corn to China and 140k tons of corn to unknown All the announced sales to China has not been seen so early in the year in the last 5 years China has more corn booked already than the USDA budgeted for all origin imports to China

• August 25, 2020

  Grains finished higher with hot, dry forecasts feared to be pushing crops and thus reducing yield I believe the August USDA production numbers are the highest we’ll see this crop year with weather stressing plants along with storm damage ravaging big producing areas Weather looks to cool off and bring rain early next week from Hurricane Laura Typically it takes a strong atmospheric disturbance like a hurricane to change dry weather patterns USDA reported that China bought 16.1 million bu. of corn & 7.5 million bu. of soybeans Unknown destinations also bought 5.2 million bu. beans & Japan bought 3.9 million bu. of corn China and US trade representatives held their virtual meeting regarding the Phase 1 trade deal Both sides appeared to be pleased with the progress, although China has a long ways to go to fulfill it Corn condition ratings fell 5% yesterday to 64% good/excellent vs. 57% last year and 66% on average Soybean condition ratings fell 3% to 69% good/excellent vs. 55% last year and 64% on average