This week’s action:
Corn Dec23 up 3 at $4.78 *contract low $4.68 9/19
Beans Nov23 down 43 at $12.95
KC Wheat Dec23 down 24 at $7.11 *contract low $7.07 9/22
Fats October flat at $186.975 *contract high $187.45 9/19
Feeders October down 5.20 at $259.20
Hogs October down 1.575 at $81.525
Corn Dec24 flat at $5.07
Beans Nov24 down 25 at $12.56
KC Wheat July24 down 25 at $7.10
Harvest has ramped up in certain areas (mostly south of I-80) this week. Most western corn belt farmers look to begin harvest in earnest next week once rains move through the region over the weekend.
Front end premiums have existed (especially for dry corn) as the pipeline is empty. Most of the harvested fields so far have been dryland with yields mostly 10-20% below APH.
As harvest readiness varies greatly from county to county, I look for harvest to be “drawn out” rather than a quick “gut slot” push. I believe this keeps the pipeline from being overwhelmed; in turn keeping basis historically firm as we progress.
In general, the theme seems to be: take dryland crops to town and store irrigated crops in hopes of a cash price rally post-harvest. Lower yields mean more on farm storage is available.
Keep in mind from last week, the “commercial” does not own much of this new crop and farmers are generally uninterested in selling at these levels.
Futures = global supply and demand
Basis = local supply and demand
*supply does not always equal “available supply” if the farmer is an unwilling seller and holding bushels off the market
USDA reported the value of a bushel of corn in Iowa for ethanol and products is $8.36/bu.
CONAB (Brazil USDA) is estimating record crop of 162.4 million tons vs 154.6 million tons this past year on increased plantings.
Rains are predicted to fall in various spots around the western corn belt over the next few days. East of the Mississippi River should have ideal harvest conditions over the weekend and into next week. Sunshine and warm weather is expected in the western corn belt mid-next week. The Mississippi River basin would welcome heavy rains in hopes of elevating river levels.
There are no frost threats in the foreseeable future.
7 Day Rainfall Forecast:
Cargill released their annual earnings this week. Net income was $3.81 billion compared to $6.69 billion the previous year. Even with this 43% drop in profit, it was still the 4th best year in its history. A 61% increase in interest expense was largely to blame.
The U.S stock market lost more than $1 trillion in value this week, which is alarming, but the S&P 500 is still up 13% year to date. Something to keep an eye on: the top 5 stocks reflect 24% of the entire S&P 500’s market cap.
The average interest rate on a 30-year mortgage has reached 7.75%, which an increase of 5x in just over three years and the highest since November 2000.
The average homeowner’s insurance premium in Florida has more than tripled since 2019, moving from $1,988 to $6,000/year.
A report came out this week stating 95% of the NFT market is now worthless.
The U.S. debt is now $33 trillion and increases $1 billion every hour.
U.S. Treasury 5-year yields rose to 4.5%, which is the highest since 2007.
Most pundits expect a U.S. shutdown October 1 as congress debates budgetary priorities. Even if this is a short-lived event, it may have dramatic implications regarding the release of daily export sales alerts and the October 12 WASDE as government employees will not be working to aggregate data leading up to its release.
Something That Probably Means Nothing:
More illegal aliens have entered the United States than the cumulative population of 15 states since 2020.
Quote of the Week:
“A nickel ain’t worth a dime anymore.” – Yogi Berra