We received this from BJ, a client, early Thursday morning:
"The basis situation in NE Iowa is getting fun to watch. I have never seen basis this good in November. Harvest is about 99% done, so very little will be delivered straight out of the field.
Today Valero in Charles City, IA sent out a flash bid of $5.20 cash. That is $0.44 over futures!
Homeland Energy in Lawler, IA is +.10, now accepts corn up to 19% moisture, and is staying open late and on weekends trying to get more corn.
Both Poet in Fairbank and 5 Star Coop in New Hampton, IA started a ground pile, didn't get enough corn to fill the pile and now are cleaning up the pile.
Farmers have shut and locked their bins and ethanol plants are doing everything they can to try to get some of that corn. This should get interesting."
It has been six years since December corn made a new low for the year in November. We have stated several times over the past several months that the only years that December corn makes a new low after the first week of October is if the yield is larger than expected as harvest progresses.
Be sure to take some time when you get a break to study the attached S&D. There is a wealth of information on there. The three most important fundamental factors are: carryover, carryover, carryover; what is the carryover? Is the carryover getting bigger or smaller? What do you think the carryover will do in the coming months?
The USDA has lowered the 2023 corn yields every month since June. For the most part, farmers, agronomists, and crop insurance folks agreed. Yesterday, the market was expecting a two-tenths of a bushel increase on the nation’s corn crop. That small amount was not worth discussing. With a crop of 15,134,000,000 bushels, two-tenths of a bushel yield would increase the US carryout by about 10 hours’ worth of use.