THE LAND — SEPTEMBER 18/SEPTEMBER 25, 2020
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MARKETING
Grain Outlook Livestock Angles Corn market continues to ride Livestock markets overbought, high on interest from China short-term correction looming The following marketing billion estimate vs. 15.278 The overall trend in liveappreciation. Therefore, the analysis is for the week ending billion bushels last month. stock futures over the past short-term outlook is for corSept. 11. several months has been rective action with the longer On the usage side, feed higher since April. The recovterm outlook still indicating CORN — Traders returned usage and ethanol were each positive price appreciation. from the long Labor Day cut 100 million, and exports ery has been methodical and fairly persistent during this This would indicate a roller weekend with their buying were increased 100 million push to higher prices in all coaster outlook for the next shoes on! December corn pricbushels. Ending stocks were livestock contracts. It now few months in the cattle mares rallied to a new high for the down 253 million bushels ket. move and to its highest price from last month’s 2.756 bil- looks as if this recovery periJOE TEALE od is beginning to meet some PHYLLIS NYSTROM level since late March. It lion bushel forecast at 2.503 Lately the hog market has Broker CHS Hedging Inc. closed above the 200-day movbillion bushels. The average resistance as markets appear Great Plains Commodity been on rampage to higher St. Paul ing average resistance for the trade estimate was 2.433 mil- to be at levels where these levels as demand for pork has Afton, Minn. first time since August 2019 lion bushels. The average markets are technically overelevated the prices the packin the session just prior to the farm price was raised 40 bought. Therefore, some corers are willing to pay. This has brought rective type action maybe in the offing the lean index over the $60 cwt. for the September World Agricultural Supply cents per bushel to $3.50 per bushel. in the near future in all of these marand Demand Estimates report. World ending stocks for 2019-20 were kets. The good news is that the correc- first time in months. There continued to be talk of a small- 309.2 million metric tons vs. 311.3 mmt tive action is not likely to be very Another interesting event was the er corn crop and buying interest from last month and estimates for 310.8 severe and not long in duration at this fact that the lean index went from a China. There was only one fresh export mmt. For the 2020-21 crop year, ending time. premium to the futures to a discount in sale announcement during the week of stocks were 306.8 mmt vs. 310.6 mmt recent weeks. This would indicate that As far as the cattle market is con- a positive outlook by the trade is opti4 million bushels to unknown destina- estimated and 317.5 mmt last month. tions. Was the typhoon damage in These numbers were the friendliest of cerned, the recent rally appears to be mistic for future price appreciation. China worse than first thought? the corn figures. Brazil’s 2020-21 corn meeting some resistance as beef cutThe last segment of this rally has Managed money added to their recent- production was raised 3 mmt from last outs have been easing lower and the been extremely quick. This type of cash trade has slipped back to near the ly established net length leading into month to 110 mmt with exports up 1 action usually ends a move rather the monthly report. mmt to 39 mmt. Argentina’s corn pro- $100 per hundredweight level. Also, the abruptly. feeder market has fallen off during the The Sept. 11 WASDE report was duction was unchanged at 50 mmt with past several weeks as auctions have Short term, the market is overbought viewed as neutral with no major sur- exports unchanged at 34 mmt. A sur- seen prices dip since mid-August. and a corrective move is likely in the prising element in the report was prises. On the 2019-20 U.S. balance Weights have been on the rise which days ahead. However, the longer term sheet, exports were cut 30 million China’s imports were left at 7 mmt outlook would still be fairly positive bushels to 1.765 billion bushels and (275.6 million bushels) when we believe will increase the amount total beef pro- since the relationship between cattle food, seed and industrial was raised 5 they have already purchased 8.8 mmt duction which is likely to counter-bal- and hogs is still weighted toward the ance the supply to the demand which million bushels. This reduced ending (346.4 million bushels). would be another negative to price cattle. Eventually this disparity in stocks 25 million to 2.253 billion bush- See NYSTROM, pg. 20 price between hogs and cattle will corels. This was in-line with trade estirect sometime in the future. mates for 2.236 billion bushels. Another factor which is a bit worriOn the 2020-21 U.S. balance sheet, some is the amount of pork in cold storharvested acres were dropped 550,000 age. The next U.S. Department of corn/change* soybeans/change* acres (Iowa) and yield was slashed 3.3 Agriculture Cold Storage Report is due Stewartville $3.17 +.08 $9.35 +.35 bushels per acre to 178.5 bu./acre. The Sept. 24; and this could set the tone for Edgerton $3.13 +.12 $9.23 +.33 U.S. Department of Agriculture said price direction into the fall. v Jackson $3.19 +.11 $9.23 +.36 they will resurvey Iowa farmers for the October report since many were still Janesville $3.16 +.09 $9.30 +.37 determining what they will harvest. Cannon Falls $3.18 +.13 $9.40 +.34 This is still a record yield. Iowa’s corn Sleepy Eye $3.11 +.12 $9.21 +.36 yield went from 202 to 191 bu./acre, Average: $3.16 $9.29 Illinois from 207 to 203 bu./acre, and Minnesota from 197 to 200 bu./acre. Year Ago Average: $3.52 $8.10 The average trade estimate was 178.3 Grain prices are effective cash close on Sept. 15. bu./acre. Production of 14.9 billion bushels was also in line with the 14.877 *Cash grain price change represents a two-week period.
Cash Grain Markets
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Information in the above columns is the writer’s opinion. It is no way guaranteed and should not be interpreted as buy/sell advice. Futures trading always involves a certain degree of risk.
