In this week’s blog, I want to talk about the market’s recent price moves and what that does to us emotionally. In the last month and a half, we have seen December corn trade from 3.6250 on June 16th to 4.5425 on July 14th and back down to 3.66 here on Monday, August 24th. With beans showing an even larger price swing, trading at 8.9575 on June 15th to 10.45 on July 14th then all the way down to multi-year lows of 8.56 on Monday, August 24th. So what has changed here in the last month and a half? We have taken a lot of the weather risk/uncertainty off the table, with nearly perfect conditions in August. The ProFarmer crop tour ended last Thursday and on Friday after the markets had closed they came out with their crop estimates. On corn, they are expecting a yield of 164.3 for a total crop of 13.323 billion bushels, which is below the government of 168.8 and a 13.686 billion bushel crop. On soybeans, they project a yield of 46.5 a total crop of 3.887 billion bushels, compared to the USDA at 46.9 and a 3.916 billion bushel crop. We view the corn number as supportive to prices and negative to prices on soybeans.
Outside markets and money flow have been the other side of the equation that continues to give commodities major headwinds, which is often hard to predict and can be frustrating when looking at market fundamentals. Commodities, in general, have been in a major downtrend as of late, with crude oil trading around $38.00/barrel. The US stock market has been hit hard as of late also, down about 2700 pts from highs back in May.
When following results from the ProFarmer crop tour I came across this picture on Twitter. Marketing in times like this can be very emotional, which is why Central Valley Ag is here to help. I wanted to talk about CVA’s new client service offering that focuses on full-service risk management. You will receive one-on-one service from our Risk Management Consultants to discuss a break-even and selling recommendations for your individual operation. Let our team take some of the emotion out of your grain marketing and let you do what you do best. For more information, please contact your local Central Valley Ag location.