As we wrap up harvest, and I pleasantly surprised to report that the grain markets have shown significant strength during fall with what we expect to be a record crop, for both corn and soybeans. However, it could be following the trend of corn bottoming out around October 1, peak on November 1, and then bottom again around December 1, but that is yet to be determined.
Basis values around the country have not been good. Record crops and only limited capacities have made it difficult for the producer to find a reasonable bid. Those who have on-farm storage will be able to capture some carries in the cash market this year.
It has been surprising how well the grain markets have held together despite a record corn and soybean crop. Soybean prices last year hung in that $8.80/bu area from September through most of March. Currently, our low for harvest has been $9.34/bu. An early season export demand pace is mostly to do with this strength as buyers, particularly China, have taken advantage of the sale prices compared to other supplying countries and locked in their short-term needs. Keep in mind, however, that China has a tendency to cancel bookings after they confirm that South America will have a good crop with cheap supplies as well. However, as of this writing, exporters have already sold 66% of the USDA’s annual soybean target, which they are typically at 58% this time of year. Now, the world waits to see how the South America crop performs. Thus far they have had some planting delays due to dryness early on, but are enjoying rapid planting pace since then and look to have good weather that will get their crop off to a decent start.
On the subject of South America, it is predicted that La Nina will move in late 2016, early 2017 with a 90- day forecast outlook of warm and dry weather. However, the sea temperatures in the Pacific Ocean have been slower to warm than expected, which has not turned the weather to La Nina as quickly as it was projected. It will definitely be something to keep an eye on.
As always, keep a close eye on those markets and projections. I am here to help you weather this storm and walk you through your marketing decisions as best I can.