10/6/2022

Corn and soybeans were largely weaker today, reflecting a continually increasing new crop supply and hedge pressure as we get nearer each day to full harvest. The weekly export sales report showed soybeans on target with 777k tonnes of net sales but weighed negatively on corn, which missed its mark with only 227k tonnes sold. Next Wednesday we receive a fresh set of WASDE numbers from the USDA. Will they lower export expectations for corn and soy? It probably needs to happen to get our crop balance sheets more in line with actual demand instead of the prospect of demand. Soybean yields in general are far from disappointing and we have a Mississippi water system that is unable to execute barge shipments on the river. A barge owner has already declared "force majeure." The risk of export cancellations is a big reality here and the rail system can only handle so much. A quick glance at the soybean charts shows we are oversold on the short term. I like fixing basis on all new crop soybean deliveries and setting some sell-orders in the area of 1400'0-1420'0 November futures for now. For those with Nov soybean Hedge-to-Arrive, we can now net 12 cents of carry into January! December corn hedges can net 7 cents of roll to the March contract and 12 cents all the way out to July.

Partial downside gap fill today but a ¾ of a penny gap remains on the chart. Be ready to take advantage of a rally back near the 1400’0 level.