Grain Update
Nov 09, 2021
The old adage of “rain makes grain” was certainly put to the test this growing season. After a smooth and dry spring planting season, the soil that was already void of excess moisture, never received plentiful rains throughout the growing season. This caused much worry as to what yields we would see coming into harvest. It’s safe to say that our expectations, along with those of growers were fairly low. Now, one can never be 100 percent sure what is out there ahead of time, but once the combines started rolling, the early reports were better than expected in most areas. Location played a huge roll in just how good, or tough things were, but all in all the final verdict was as positive of an outcome notwithstanding the weather we had.
Large inverses in both the cash and futures market sent a clear signal to clean out as many bins of both corn and beans as we could. Both the farmer and the elevator industry seemed to do just that as inventories leading into fall were some of the lowest that we have ever seen. Although the premium faded to some extent, basis never really faded back to “normal” harvest levels as new crop was used to supply an empty feed, ethanol, and export program.
This leads us to where we are at today. With basis at historically strong levels for this time of year, the demand remains for your grain. Corn has had a unique draw this year, coming from north of the US border because of a deficit in Canada. This adds to the aforementioned local demand coming from strong ethanol margins and added grind at Heartland Corn Products. There is more of a carry in futures, which is rewarding storing beans more so than corn; the processors also need to keep crushing beans.
Soybeans have seen PNW demand out west, via shuttles, to fill the void of a shorter than normal Dakota crop. So overall, things could remain very interesting in the basis game on both commodities as we have produced a larger than expected crop and there is strong demand for it coming from all angles.
With markets that move so quickly, plan ahead as the calendar flips over and into spring, remembering to keep an eye out for what looks to be attractive 2022 pricing opportunities as well. Keep sell orders working as you never know when they will get hit with all the volatility. If you have any questions on these topics, want to make a sale, or put in target prices that can hit if the market rallies, the UFC Grain Department is here to help you with all of your grain marketing needs. Contact our grain office at our new number of 507-232-1049.
MATT RETTMANN & BRETT ANNEXSTAD
GRAIN ORIGINATORS/MERCHANDISERS
Large inverses in both the cash and futures market sent a clear signal to clean out as many bins of both corn and beans as we could. Both the farmer and the elevator industry seemed to do just that as inventories leading into fall were some of the lowest that we have ever seen. Although the premium faded to some extent, basis never really faded back to “normal” harvest levels as new crop was used to supply an empty feed, ethanol, and export program.
This leads us to where we are at today. With basis at historically strong levels for this time of year, the demand remains for your grain. Corn has had a unique draw this year, coming from north of the US border because of a deficit in Canada. This adds to the aforementioned local demand coming from strong ethanol margins and added grind at Heartland Corn Products. There is more of a carry in futures, which is rewarding storing beans more so than corn; the processors also need to keep crushing beans.
Soybeans have seen PNW demand out west, via shuttles, to fill the void of a shorter than normal Dakota crop. So overall, things could remain very interesting in the basis game on both commodities as we have produced a larger than expected crop and there is strong demand for it coming from all angles.
With markets that move so quickly, plan ahead as the calendar flips over and into spring, remembering to keep an eye out for what looks to be attractive 2022 pricing opportunities as well. Keep sell orders working as you never know when they will get hit with all the volatility. If you have any questions on these topics, want to make a sale, or put in target prices that can hit if the market rallies, the UFC Grain Department is here to help you with all of your grain marketing needs. Contact our grain office at our new number of 507-232-1049.
MATT RETTMANN & BRETT ANNEXSTAD
GRAIN ORIGINATORS/MERCHANDISERS