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www.thelandonline.com — “Where Farm and Family Meet”
THE LAND — NOVEMBER 12/NOVEMBER 19, 2021
MARKETING
Grain Outlook Corn edges upward after WASDE report The following marketing analysis is for the week ending Nov. 12. CORN — December corn slid slightly ahead of the November World Agriculture Supply and Demand Estimates report, but tagged along with soybeans in post-report trading to break a five-session losing streak. The soybean numbers were the surprise, but corn took its cue and benefited from small gains. Taken alone, the corn report might have been considered bearish, but the postreport rally pushed prices toward the November $5.86 high. The corn yield was increased by a half-bushel per acre to a record 177 bu./acre and higher than the 176.9 bu./acre estimate. This PHYLLIS NYSTROM bought production up 43 million CHS Hedging Inc. bushels to 15.062 billion bushels, St. Paul the second-largest on record. On the usage side, ethanol use was raised 50 million bushels to 5.25 billion bushels while exports were unchanged. The export forecast at 2.5 billion bushels may be an uphill climb since China hasn’t been in for U.S. corn since May. The ethanol estimate may be too low based on excellent margins. Ending stocks fell just 7 million bushels to 1.493 billion bushels compared to 1.48 billion bushels forecasted. The average farm price remained at $5.45 per bushel. World ending stocks were much higher than anticipated at 304.4 million metric tons vs. 300.8 mmt estimated and 301.7 mmt in October. Brazil’s corn production was unchanged at 118 mmt. Argentina’s corn production jumped 1.5 mmt to 54.5 mmt and compared to estimates for 53.1 mmt. On China’s balance sheet, they estimate its 2021-22 corn imports at 20 mmt vs. the U.S. Department of Agriculture’s 26 mmt projection. Weekly ethanol production fell for the first time in six weeks to its lowest point in four weeks. It dropped 68,000 barrels per day to 1.04 million bpd. On the other hand, ethanol stocks rose 157,000 barrels to 20.29 million barrels and a nine-week high. Gasoline demand was declined to 9.26 million bpd from 9.5 million bpd and the lowest in four weeks. Ethanol margins made an impressive jump of 29 cents per gallon to $1.36 per gallon! Weekly export sales were good at 42 million bushels. Total sales commitments are 1.262 billion bushels vs. the USDA’s target of 2.5 billion bushels. This
could offset some of that increase. Another factor to consider when watching prices is inflation. It’s not unusual for agricultural commodi corn/change* soybeans/change* ties to benefit from an inflation hedge standpoint. Money flow into commodities may provide underly St. Cloud $5.51 -.02 $12.21 -.05 ing strength at times when fundamentals aren’t in Madison $5.57 -.02 $12.28 -.05 agreement. Watch the big picture and not just on our Redwood Falls $5.61 +.08 $12.31 -.05 supply/demand sheets. This doesn’t translate into a Fergus Falls $5.56 -.02 $12.21 -.05 wildly bullish outlook but does add another dimen Morris $5.56 -.02 $12.26 -.05 sion to price ranges. We may expect further consoli Tracy $5.59 -.06 $12.30 -.05 dation as we head into the holidays. Don’t forget about the 2022 crop you intend to plant! Average: $5.57 $12.26 December corn has found support in the $5.50 to Year Ago Average: $3.79 $11.06 $5.30 area with resistance from $5.70 to $5.75 per Grain prices are effective cash close on Nov. 16. bushel. For the week, December corn was rallied *Cash grain price change represents a two-week period. 24.25 cents to close at $5.77.25, March was 22.75 cents higher at $5.85, and December 2022 closed 8 is running 6 percent behind last year. We need to cents higher at $5.48.5 per bushel. average 28.3 million bushels of sales per week to hit SOYBEANS — Soybeans took a step back to begin the bull’s eye. Weekly export inspections were the the week and traded to a seven-month low before lowest in seven weeks at 563,100 metric tons. getting a friendly surprise from the USDA. The Cumulative inspections are down 21 percent from a November WASDE report didn’t disappoint those year ago. China’s corn prices are up nearly 9 percent looking for a catalyst to create some excitement. The this month. Russia hinted they will have grain USDA cut the U.S. soybean yield .3 bu./acre instead export quotas in the first half of next year. There of raising it .4 bu./acre as expected. Low pod weights were rumors in the trade that China was interested/ were cited as a factor. This lowered production 23 buying corn from Ukraine despite U.S. origin being million bushels to 4.425 billion compared to 4.484 cheaper. billion bushels estimated. Exports were reduced 40 million bushels to 2.05 billion bushels. The crush was left alone; which was curious since margins have been very high for quite a while. Ending stocks Another factor to consider when were still up 20 million bushels from last month to watching prices is inflation. It’s not 340 million bushels although the trade was looking unusual for agricultural commodifor a jump to 362 million bushels. The average farm ties to benefit from an inflation price fell 25 cents to $12.10 per bushel. Based on the hedge standpoint. updated numbers, both the yield and crop size would — Phyllis Nystrom be the second-largest on record. On the world balance sheet, Brazil’s soybean estiThe Farm Service Agency released their planted mate was unchanged at 144 mmt. Argentina’s crop and prevented planted acres at mid-week. Nothing size dropped 1.5 mmt to 49.5 mmt. China’s soybean was shocking about the numbers. They put corn acres imports were lowered 1 mmt to 100 mmt on the enrolled in crop subsidy programs at 91.354 million USDA report. China’s balance sheet has its bean acres. Prevented plantings were 639,000 acres. imports at 102 mmt. World ending stocks were Soybean acres enrolled were 86.249 million with pre- reduced more than expected at 103.8 mmt vs. 105.5 vented plantings of 341,225 acres as of Nov. 1. The mmt estimated and 104.6 mmt last month. USDA is using planted corn acres of 93.3 million and The big surprise late in the week was in soymeal, planted soybean acres of 87.2 million acres. The FSA which has vaulted $56.70 per ton from its Oct. and USDA numbers do not usually match, and nei13 low at $309.30 to this week’s high at $366 per ton ther is obligated to reconcile the figures. — for an 18.3 percent recovery. This was the highest Argentina’s corn planting was 43 percent complete price since August. What are we missing? Is as of Nov. 11 vs. 44 percent on average. Conab raised Argentina running short on meal for export? Is their their Brazilian soybean crop estimate by .4 mmt to soybean outlook more concerning than we think? 116.7 mmt. La Niña›s effects will likely be felt through Outlook: Demand and growing conditions in South February. Will the long awaited Renewable Fuel America will gain in importance over the next few Standard mandate be unfriendly to agriculture as months. It would not be unusual for the corn yield to some believe, which could pressure soyoil? increase on subsequent reports. Argentina’s corn proWeekly export sales were within expectations at duction was higher this month as the crop gets 47.4 million bushels. This keeps us 33 percent planted and higher soybean export taxes may encourage additional corn acres, but high fertilizer prices See NYSTROM, pg. 12
Cash Grain Markets
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.
