USDA Acreage and Grain Stocks Report
By Matt Morog, Grain Department Manager
The USDA came out with the planted acres and current stocks report for the US. Included below is the corn and bean highlight from CFC’s broker, RJO.
My general feeling is we are seeing an over correction to the past 45-day rally. I doubt we see the old highs anytime too soon, but corn should find some support at these levels. On a technical level we are right at the 200-day moving average and in oversold territory. I’m not sure this is the best time to be making up “catch up sales”. Beans, I’m afraid to say, could have more downside before finding a bottom. They're above the recent lows still by over 50c. We still have a long summer ahead of us weather wise. If the market does give us a gift here over the next 30 days and you think you’re going to have a crop, sell something.
By Jeff Moritz, Lead Grain Merchandiser
We reached that point in the marketing year whereby the grain markets fate will be determined by daily weather model runs. This week happens to be that week as NOAA released their 90 day Seasonal Outlook indicating that temperature will be above normal and rainfall below normal for the timeframe. Row crop weather to this point has been close to ideal in general around the corn belt but any hint of adverse weather and the market will attempt to price it in quickly, as we saw with the price action on Thursday. With US old crop stocks as snug as they are on corn and soybeans, it’s key that this year’s crop matches or exceeds projections.
On Wednesday, Informa estimated the US ‘22 soybean acres at 88.7 million vs USDA March estimate of 90.9 million and pegged US ‘22 corn acres at 91.0 million vs USDA March estimate of 89.4 million. We will have to wait until June 30th to get updated planted acreage data from the USDA. That’s the supply side story.
From the demand side, positives were hard to find this week as USDA reported a cancellation of 100,000 MT US old crop soybeans from unknown. Weekly Export sales left a lot to be desired for corn as old crop was below pace to reach USDA. Soybean sales did expectations, but shipments last week were below the pace needed. With Brazilian soybean basis trading at approximately 50 cent discount to US basis currently and the US dollar ripping higher due to rampant inflationary pressures, makes the US the supplier of last resort.
As an aside, the Fed did raise the interest rate 75 basis points; but is it too little too late? Based on Chairman Powell’s comments they are almost resigned to the fact that there is little they can do to suppress food and energy prices at this point.
Corn for ethanol production increased this week, but in the June WASDE, the USDA left their estimate unchanged 5.375 billion bu. Based on EIA ethanol production estimates, implied usage is closer to 5.335 billion bushels. Monthly pace needs to average 454.9 million bushels. April usage was 414.7 million and May 2021 usage was 448.7 million bushels, so there is ground to be made up if corn is to meet demand projections. While it is summer drive season, how much longer is the US consumer willing to drive through $5 or $6 gasoline?
As volatile as these markets have been and more likely will continue to be, consider putting in target offers with your local CFC originator. Grain prices are still very lucrative as old crop has topped $8.00 cash and new crop nearing $7.00 cash once again. Soybean returns are very profitable too with new hovering right around the $15.00 cash mark. Many customers have been finding success with achieving the price they desire even in a ‘fast’ market.
On behalf of all of us at CFC I would like to wish a Happy Father’s Day to all you Dads out there and thank you for your business!
Reminder, Grain Markets will be closed for the Juneteeth holiday on Monday, June 20th.
No one fools with Mother Nature!
By Rebecca Johnson, Elevator Location Manager, Salem
Three weeks ago, Mother Nature produced an event of straight line winds, a derecho or a haboob in parts of South Dakota. A lot of people discussing the event in the aftermath of the storm brought up there had to be a tornado along with those straight-line winds. Though the only place I heard talk of an actual tornado was in Castlewood, I was curious what a derecho or a haboob were compared to straight- line winds. In case you did not know the difference either here is what I found out:
A straight-line wind is thunderstorm winds that have no rotation. They can reach over 100mph and are caused by air being dragged down by precipitation.
A Derecho is a line of intense widespread and fast-moving straight-line windstorms and sometimes thunderstorms that move across a great distance and characterized by damaging winds. A Derecho can produce destruction like the strength of a tornado with damage usually in one direction with a relatively straight swath. If wind damage extends more than 240 miles and has wind gusts of 58mph or greater for most of those 240 miles, the event is classified as a derecho according to the National Weather Service.
A Haboob is a violent and oppressive wind blowing in summer bringing sand from the desert. These are usually seen more in the Sahara’s but also are seen in the arid and semiarid regions of North America such as Arizona, New Mexico, Eastern California, and Texas.
No matter what the event is named it showed us how quickly it can produce destruction.
Please be safe as you continue to clean-up the aftermaths of the storm. Stop by or call any of our grain locations with questions about grain you still have to market and on the upcoming harvest season.
Wishing all a safe and enjoyable summer.
Central Farmers has a mobile app that provides real time business information at your hands. By partnering with BUSHEL, we are able to empower you, our producers, to make informed and quicker business decisions with CFC.
- Access scale tickets, contracts, bushel balances, cash bids and market information— all from your smartphone.
- Access scale tickets virtually in real time, allowing you to know how many bushels you have delivered and how much still needs to be delivered. The Scale Ticket interface is easy to understand and tracks grade factors such as Moisture and Test Weight.
- Access your contracts that you have with any CFC location. You will be able to see the status of any contract to find out whether it is filled or is still open.
- Access real-time bushel balances of your grain across all CFC locations.
- Access delayed cash bids for all of our CFC locations. You will be able to access Grains, Livestock and Ethanol Futures from CME or MGEX.
You can find the App on Google Play for Android devices or the App Store for iPhones by searching for Central Farmers. Download it today!
FREMAR LLC strongly recommends farmers verify their seed varieties are approved for significant export markets.
We plan to selectively test loads delivered to our grain handling facilities.
We reserve the right to reject crops with unapproved traits.
If you have seed that is not approved for significant export markets, we encourage you to check with your seed sales representative to see if your order can be exchanged for seed that is approved for global use.
It is ILLEGAL to dump treated beans at ANY grain facility!
the bushels on these contracts must be cashed out at the closing price on that date
and the check will be mailed to the producer.
Please click here for the official South Dakota Public Utilities Commission Warehouse Division Ruling
Monday - Friday day hours are 8:30am - 1:15pm.
Central Farmers Cooperative continues to purchase grain for all locations while the CBOT is open and closed.
The extended hours continue to put more volatility into the market. We encourage our customers to continue to utilize our offer system. Your offers have the potential to be filled at any time while the market is open.
Please call your local Central Farmers Cooperative location to place your offers as well as any questions you may have.
Thanks as always for your patronage.
Grain Department Manager
Lead Grain Merchandiser
Lyons Grain Originator
Salem Elevator Location Manager
Dimock Location Manager
Canova Location Manager
Freeman Location Manager