Nate Bruce, Farm Business Management Specialist, firstname.lastname@example.org
Written October 20, 2022
Corn prices have been on an upward trend over the course of the month but have consistently stalled at the $7.00 / bushel price mark. Some Midwestern states are experiencing very slow corn harvests this year with moisture issues. Soybean prices dropped during October and broke support at the $14.00 / bushel level. In the last week, prices have trended higher but have not approached close to the $14.00 / bushel mark again. Causes for soybean price decreases are increased production estimates in South America and reduced demand for soybean oil. It is becoming evident that the high soybean prices that occurred in September followed the typical norm of historical highs during that month. Plaguing both soybean and corn prices are issues with the Mississippi River having historically low water levels right now. This is making it challenging for barges navigating the water way when export demand should begin picking up. Wheat prices were on the rise for most of October but have stalled in recent weeks. The price direction of wheat has been highly correlated by events occurring in the Ukraine-Russian War. Making marketing decisions is extremely challenging for wheat because price seems to be solely influenced by the events in the conflict.
The October USDA World Agriculture Supply and Demand Estimates Report (WASDE) estimated corn ending stocks at 1.172 billion bushels, down 4% from the September estimate of just under 1.219 million bushels. The USDA WASDE estimated reduced supplies, greater feed and residual use, lower exports and corn used for ethanol. Soybean ending stocks remained the same as the September estimate at 200 million bushels. The USDA WASDE estimated reduced soybean total use from the September estimate with an increase in demand for soybean crushings but decreases in export and residual demand. Wheat ending stocks were projected at 576 million bushels, down 6% from the September estimate of 610 million bushels. The USDA WASDE estimated reduced demand for wheat feed, domestic use, and exports. Wheat food and seed demand remained unchanged.
In international grain market news, Russia is currently supporting an extension of their grain export deal despite concerns about its implementation. If the deal is not renewed, Russian agricultural exports such as potash fertilizers could be hindered. Thus far, much of the Ukrainian grain that has made its way out of the country has not gone to poor developing countries as the original deal had intended. In South America, drought has hampered corn planting, particularly in Argentina, the world’s third largest grain exporter. The Rosario grains exchange reported the slowest corn planting in six years. The Rosario exchange reported that early planted corn will only account for 10% of the total planted crop this season. Uncertainty about carryover is prevalent and now many other countries grain seasons are getting underway. Below are futures for corn, soybeans, and wheat.