Corn futures have spent the last sessions with no gain, as harvest progress is ahead of normal, and the crop seems to be getting better. Summer concerns of crop damage to corn from dry weather are fading as the harvest winds down.
Meanwhile, the soybean crop seems to be worse than expected, and slow planting in South America is helping prices firm. Monday, Nov. 6, as this was being written, saw soybean futures for November and January each up 10 3/4 cents for the day.
Both corn and soybean harvesting are ahead of the normal pace. Little remains to be binned, so we are running out of reasons for higher prices. The only bullish news was that from South America, that their planting was slow.
As of Nov. 5, the U.S. Department of Agriculture is reporting that 81% of the corn is off, and 91% of the soybeans have been cut. Both of those represent an earlier finish to harvest than normal. Our corn is normally at an average of 77% now. The soybeans are normal at 86%.
Ohio farmers are actually behind the average progress on corn, but ahead on soybeans. We have 45% of the corn off, which is a big gain from the 29% of last week. However, the Ohio harvest average at the point is 62%. The soybeans are a similar situation. Ohio farmers have 69% harvested, up from 80% in a week. The average is only 83%, however.
There is some minor mixed news in the corn market. First, the Fed met last week and did not change interest. This contributed to a 2% loss in the value of our dollar, which, in the short run is good for prices. That is, a cheaper dollar makes our commodities less expensive when exported and makes us more competitive. Two percent cheaper in the dollar can translate to a dime of price.
On the other hand, we are seeing a five-year low in gasoline consumption. Since much of our corn goes into the production of ethanol, this is bad for prices. Meanwhile, our corn exports were better than expected, so that is good for prices. Mexico was our biggest customer this week.
We will be more competitive with Brazil next year, as their crop is now projected to limit exports to be only 38 MMT, down from 58 this year. There is a ripple effect here. Argentina has been too dry, so more of the corn will stay in the region. Also, the late soybean planting currently helping our prices will limit the number of acres that normally goes into the second crop corn, planted after the soybean harvest.
For perspective, December corn futures had the high at $6.29 3/4 on June 21. We have traded several cycles since then, getting as low as $4.69 1/5 Nov. 2 and most recently trading at $4.75 1/4 (10:30 p.m. on Nov. 6).
The soybean situation is a little better because of the planting delays in the Southern Hemisphere, as mentioned before. However, a negative piece of news is the exports for this week, which were less than for the same week last year. Our total soybean exports are now at 12.198 MMT, which is 5% less than last year at this time.
Soybeans have had some big price swings this summer. We traded November futures at $14.35 in late July, but have lost most of a dollar since then, until the rally the last three days.
Soybeans will eventually be helped by the dry weather that cut the bean crop in Argentina this year. They are the world’s largest exporter of soymeal, and we look to get that business from them. The adjustments in the world balance sheet of supply and demand is helping the bean meal price, which was up $70 a ton in the last month. This, in turn, is helping our bean prices.
We will get the next WASDE report from USDA Nov. 9, and that may affect our outlook. Some traders think we will see a slight upward revision in soybeans yield, maybe by a third of a bushel. That could slightly hurt our prices, unless we are already trading that number.
Our Chicago wheat futures were up almost four cents for the week. We only see little correction from the general trend of downward prices that has lasted since the December futures high just under eight dollars in late July. Then, we traded $7.96 1/4, but the last day of October we got as low as $5.54 1/2. That is almost $2.50 loss in three months, with no up and down cycles. The price has been in steady decline.
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