Weekly Market Recap and Tom's Take. September 25, 2020

CSS Scale room Landus Cooperative

MARKET UPDATE:

December corn futures gained 1 3/4 today, closing at $3.65 1/4, or down 13 1/4 for the week. March corn ended at $3.73 1/4, up a penny today, but losing about 14 this week. 

November soybeans gained 2 1/2 today, ending at $10.02 1/2, but losing 41 week-on-week. January beans added 3 today to end at $10.06 1/4, also down about 41 for the week.

The BIG story this week is this downturn in values for both corn and beans. Both finished last week on a high note and we’ve been lower every day since, until today. The good news, especially for soybeans, is that cash prices remain close to $9.50, which is quite a bit more than any of us were thinking when August started. Corn prices, on the other hand, aren’t really getting anyone overly excited, even though many of us were afraid we’d be seeing cash prices 30 to 40 cents lower, possibly in the high $2 area during Harvest. I know that many farmers are fairly optimistic that prices will rise once we wrap up harvest in the U.S.

We continue to believe that putting a floor under the current cash price is a prudent thing to do, especially for soybeans. I spent a lot of time last week discussing that, so I won’t go into a lot of detail here. But, I did want to mention one thing, due to some feedback I received this week. It’s important to note that when we talk about Minimum Priced, or Min-Max, or Extended Price Contracts, that we make it very clear that the producer is NOT opening a Brokerage account. These contracts are all cash contracts. So, when we say you will be buying a call option, it means as a part of the cash contract. In reality, Landus is buying a call option and we will keep that in OUR brokerage account. And then, when you want to re-price (or sell) that option, we will sell the one in OUR account. 

If you truly want to open up a brokerage account, we also offer that service. Then, you can buy or sell futures, buy or sell options whenever you want. Whatever makes sense to your operation. A brokerage account separates decisions and actions from physical cash sales and can be an important part of a marketing plan. If you are interested, please contact your local Grain Marketing Advisor and they will connect you with one of the brokers we have on staff. 

For more information on items impacting the prices of corn and soybeans, please tune into our FREE weekly podcast, the Bull Bear Banter: https://landusexperience.podbean.com/

TOM’S TAKE:

HARVEST is here. For all of us in this industry, harvest is a mixture of excitement and fun as well as stress and long hours. Earlier this week, I was explaining to a couple of our newer employees that this is THE time when we see our customers a lot and we should find time to thank them for their business. It’s important to let our customers know how much we appreciate their business. 

Then, I told them a story of the first harvest I worked. As many of you know, I started my career in my family’s grain elevator business. During that first harvest, I was really concentrating on making sure I didn’t make mistakes: Weigh the truck correctly; Probe the truck correctly; Grade the grain correctly. My Dad and I would take turns alternating between the 2 stations we had set up. 

I noticed that when he was running the scale, he ALWAYS said the same thing to the person delivering the grain when they came in to get their scale ticket. He ALWAYS said “thanks”. I started counting. By the end of one day, he had said thanks to THE SAME GUY about 12 times. I finally had to ask him “WHY do you do that? You’ve said thanks to that guy 10 or 12 times today…I don’t get it”

He just pointed out the window at the back end of the truck as it was leaving, and said “if that guy doesn’t feel appreciated when he comes in here, we might as well close this place…they are our lifeblood and we need to let them know we appreciate their business on EVERY SINGLE load…any more questions?” I just looked at him and smiled and said “THANKS!”

I know we don’t say it often enough, but we truly do appreciate your business. We also want you to know that we want to continue to EARN your business and where possible, do more business with you. It’s beneficial to all of us. The more business you do with us, the more equity you build in the business you own. But, it starts with us at the co-op. We need to let you know how we can help you strengthen your bottom line, whether that is through our marketing programs or our agronomy programs. 

Speaking of which, the deadline for the Landus Acre Reserve program is next Wednesday, September 30th. Our Agronomy Team has a lot of really good reasons that you should be talking with them prior to next Wednesday. Please contact your local FSA for complete details. Also, talk to them about our AcreEdge soybean seed. As a member-owner, you own this seed selection, why not build some more equity by using this seed? The agronomists are also busy gathering plot data as well and have some really interesting info about that, too. THANKS!!, Tom.Guinan@LandusCooperative.com