This is the SFN Market Report with Brooks Schaffer of Palmetto Grain. Reach him at brooks@palmettograin.com or 843-540-4540.
The volume in the grain and oilseed markets has still not recovered to what we were seeing before Thanksgiving. There is just nothing new to push the markets out of the ranges we have been trading for what seems like forever now. This is the last full trading week before Christmas so unless something really surprising happens, we probably will not get normal volume back until we get into the new year. The January USDA report will be the biggest piece of news we have had in a while. It will set the tone of the market into the new year. News this week has been light and we have not seen anything new or market moving. The NOPA crush report came out Monday for November crush. While we set a new monthly record for November, 3 out of 3 monthly records so far this marketing year, the number was a little below expectations so the market read it as a little bearish. Export inspections came out Monday afternoon and were respectable. Corn exports were at the top end of expectations, soybean and wheat inspections were solidly within expectations. There is a lot of riding on this Thursday’s export sales report since last week was so disappointing. We do not need to see export sales fall off a cliff this early in the year.
I would like to talk a little about new crop but struggling to find much positive to talk about. The corn balance sheet is tightening up on old crop which is a good thing but if something does not change on beans we are going to plant way too many acres of corn for at least the third year in a row in the US. Without a weather problem in South America, the bean balance sheet will be comfortable and the market will be content to give up acres. New crop corn is currently around $4.40 and new crop beans are just below $10. These are not levels that are very attractive to lock in right now with inputs where they are. These prices are fairly bitter pills to swallow for the old crop in the bin where our cost of production is known. My advice on acreage selection for the new crop is to stay as flexible as you can for as long as you can. If we get a weather hiccup in South America the market will give us a clearer signal as to what we need to plant and also an opportunity to lock something in at profitable levels. As always though, let your agronomics have a louder voice on acreage selection. Let the market be the tie breaker.