Why You Should Be Storing Your Beans
Sep 18, 2017
Market Commentary for 9/15/17
While the USDA report this week was bearish, the market closed like it didn’t matter. Corn lost 3 cents and beans gained 7 cents on the week. Typically corn prices don’t increase after the September report through the end of September, but we’ll see.
Early reports from the field suggest yields are questionable and varied. 20% of the corn on our farm in Nebraska is harvested, and so far it’s yielding 10-15% below average. We expected lower yields though on these fields because they are on dryland and in July we missed some rains in our area. We expect at least average yields on the rest of our acres since they are irrigated fields planted with longer season corn. It seems every year the market hears of these lower than expected yields as the harvest starts, but by the end we find that the yields are much better.
Worldwide US corn prices are competitive. This may suggest corn prices are finding some support, as long as the US dollar doesn’t increase against the Brazilian currency or South American farmers decides to sell a lot of corn.
Soybean demand continues to be strong. Globally, US beans are competitive to world prices with futures around $9.50-$9.70. The major factor impacting prices going forward will be South American farmers sitting on old crop. To maintain these price levels, the US dollar needs to remain steady to the Brazilian currency and South American farmers need to hold off making a lot of sales as they start planting over the next 6 weeks. Planting conditions throughout South American will also keep some uncertainty in the market. While some areas have been too wet and others too dry, the bean planting window is wide and there shouldn’t be too much concern for at least a couple weeks.
In the US, big yields are being estimated for the 2017 harvest. Spreads between contract months suggests the market wants soybeans later and basis is weakening as harvest approaches. Technically beans bounced off the 9.80 level and could continue to trade lower, but it’s hard to say if the bean low for the year has happened. As harvest gets in full swing, it will be difficult being bullish beans until after October 1st.
During harvest, I can’t logistically haul soybeans from the field to the processor. We don’t have enough trucks or…