Jon Scheve with weekly market commentary made on October, 7, 2022
Corn and beans finished the week at the same price level as one week ago. With harvest in full swing and no significant weather issues forecasted that would slow progress, this seems to be a positive sign for prices moving forward. However, there are still a lot of unknowns in the market that need to get answered before we have a better sense of upcoming price direction and ranges. Yields The biggest unknown is what the national average yield will be. The market will have a better idea Wednesday when the USDA publishes their updated supply and demand estimates. Currently there is a wide range of guesses for both crops, so depending on what is published, there could be big price adjustments. Ukraine It is uncertain if the current export corridor program that allows grain to be shipped out of the Black Sea will be renewed in November. Mississippi River The Mississippi River water levels are so low that shipping grain by barge has been significantly reduced, right when bean export pace should be ramping up. This has put significant pressure on basis values near the river and increased the carry in the bean market. Plus, weather forecasts for the next few weeks do not show any immediate relief for the situation. This could reduce total bean and corn exports long term and keep prices suppressed. La Nina South America’s planting season has started, so the market will start focusing more on weather conditions in the Southern Hemisphere moving forward. The market seems to be trading normal yield and weather conditions. Bottomline This week’s USDA report could move prices substantially if yield estimates are changed. Longer term events surrounding Ukraine could impact demand, while South America’s weather will increasingly be a factor for the market.
Jon Scheve Superior Feed Ingredients, LLC
9358 Oak Ave Waconia, MN 55387 jon@superiorfeed.com