Corn posting a narrow trade range this week with a high of 6.89 ¾ and a low of 676 ¼ but ultimately ended the week down 1 cent at $6.80. This is one of the narrowest trading weeks we have seen all year as the market weighs the lower supplies with the potential of demand destruction and lower exports. Exports are down 54% from last year, but there is still time for us to get corn sales on the books. The US dollar has outpriced US corn to the world market with Ukraine and Brazil offering much cheaper corn. Brazil’s freight on board price has been more than $1.50 per bushel cheaper than the US but they are starting to run low on corn supplies. Domestically corn demand is still strong as ethanol margins have weakened but are still strong. Basis continued to improve through harvest and now that harvest is wrapping up the farmers won’t be taking corn out of storage unless the board price rallies or basis improves enough to make the cash price inciting enough.
Soybeans starting off the week lower with a 23 cent drop on Monday but recovered most of that loss throughout the week. November soybeans started off the week at $13.93 and ended the week at $13.87. November soybeans will go off the board on Monday with a 12 cent carry in the market. The Mississippi River water levels are messing with soybean spreads. With strong demand for soybeans and basis levels at record highs for this time of year we should not see carry in the futures market. With barrages being backed up to transport the soybeans the market has had to rely on trucks and railroads. The US typically exports soybeans at harvest through March since South America will have soybeans ready at that time. China will only buy enough soybeans from the US to get them to Brazil’s harvest so if we miss our opportunity now it could drop export expectations even further.
Chicago wheat has been struggling to gain momentum despite low world supplies putting into a back and forth trade this week. Wheat fell from $8.33 to $8.29 Russia is still offering the cheapest wheat with their expected record wheat production. Russian wheat is currently $2.50 cheaper per bushel than US hard red winter wheat. There continues to be unknowns with the safe passage agreement with Russia claiming only 3% of the exports went to the struggling countries pointing to him potentially not renewing the agreement. There are also issues with US winter wheat planting in drought conditions and Argentina is also facing similar problems with just 11% of their crop being rated good to excellent.
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