On Friday, September corn futures gained 1/4, ending at $3.16 but, that is down 10 1/4 from last Friday. December corn also gained 1/4 cent today, ending at $3.27, losing 8 this week.
November and January soybeans both gained 4 1/4 today, but both also lost 6 3/4 for the week, with November ending at $8.92 1/2 and January closing at $8.98
The Big Story this week was China taking another step forward to meet their Phase 1 agreement with a very large purchase of U.S. corn. Announced Thursday morning, they bought 1.937 million metric tons of New Crop corn. This is their largest single-day purchase of corn and equates to a little more than 76 million bushels. Their second largest purchase of U.S. corn was earlier this month when they bought 1.76 MMT (just over 69 million bushels). This is also the 3rd largest export sale of corn EVER. You have to go way back to 1991 to find a larger sale, when the USSR bought 3.7 MMT (close to 145 million bushels). You know it’s a long time ago when we’re referencing the USSR. If you were to add those 2 July purchases together, they would be slightly more than the USSR sale. At the time it was initially announced, on Thursday morning, the corn market bounced a little higher, and at one point was up almost 4 cents. But, as more people started to weigh in with comments, it sounds like this sale had been anticipated for a couple of weeks. At the end of the day, corn was only up 1/4 cent, as the talk turned back to the crop in the field getting better and weather forecasts turning more favorable. So, I guess we keep our fingers crossed and hope for more sales of corn to China over the next 12 months.
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This week I was reminded of the old Creedence Clearwater Revival song, “Lookin’ out my back door” and I have to admit I have been a little guilty of that recently. But, when I saw the crop scores on Monday, it really drove the point home. With so many states showing improvement and Iowa going backward, it’s not hard to conjure up that imagery. It’s really hard to be in that one spot in the country with a crop regressing while the rest of the country improves, and prices continue to retreat.
I also have to remind myself that what is happening in Iowa is not a complete failure, as overall, we’re still above the 5-year average. Even in the worst parts of the state, the crop is there and while it will yield less than it has for many years, it’s just not on the trajectory of a record crop like we were all hoping for after excellent planting conditions in April.
I mentioned this to my dad recently and he told me about his grandfather losing 240 acres one year. I said something like, “that couldn’t have been a good year”, and that is when he told me that his grandpa only farmed 80 acres. My dumbfounded look brought the answer. He had planted winter wheat, but it died before it could germinate; planted corn, and it withered up and died and then finally planted buckwheat and again had nothing to show for it. Granted, this was in the ’30s, but still, what a horrible year.
So, while it might not seem like the right thing to do, based on what you are seeing out your back door, keep looking for your spots, and sell some corn out in the deferred months before you want to deliver it. With beans, if/when we see futures spike above $9, make a sale.
Questions/comments? Let me know: Tom.Guinan@LandusCooperative.com
Have a great weekend