Rally stalls for corn, beans and wheat

The grain rally from early October to early November seems to have stalled for now, as the great rally during harvest of a record large U.S. corn and soybean crop has finally stalled with rumors of South American imports of soymeal. Both corn and soybeans have slowed their rally, and wheat seems to be the laggard of these two crops the last few months. We also seem to be filling the empty pipeline of soymeal in the U.S., as slowly we are processing more product than is being consumed. But it is a slow process, kind of like filling a large swimming pool with a water hose!!! It gets done, but agonizingly slow is the process.

While export sales have slowed for most grains, we still are shipping an inordinate amount of soybeans each week, with Monday’s Nov. 24 numbers around 108 mb soybeans, but only near 20 mb for corn and wheat. It will be interesting if we can sustain that pace of exports until South American harvest occurs.

Corn is now 94% harvested (advancing 5% last week), ahead of the normal pace of 92% as we are nearing the end of the harvest. Less than ideal conditions exist in many areas, especially the north as cold weather has settled in during November, and that led to snow in many areas. Give farmers credit, though, for struggling through the snow and cold weather to get the corn harvest off.

Soybeans are 97% harvested, now slightly behind the 98% completed normally at this time, and up only 3% from last week. The snow in some areas is more problematic for soybeans than corn, as it is possible to harvest corn with some snow on the ground. Not so with soybeans! Wisconsin soybean harvest for example, is only 95% complete and there is snow on the ground in Wisconsin. Minnesota also is 99% harvested, with snow as well in central Minnesota. Michigan is 96% harvested, behind the normal pace of 100%. Indiana is 96% harvested vs. 99% normally, so there are some concerns on the remaining harvest of soybeans.

Cotton is 77% harvested, behind the normal pace of 83% complete. Sorghum is 88% harvested, now behind the normal pace of 91% complete. Sunflowers are 86% complete vs. 90% normally; with the snow in North Dakota and South Dakota stalling harvest there at 86% complete each. The cold and snowy weather are stalling harvest of sunflowers as the moisture gets into the heads and slows harvest. But once the snow falls/melts off the heads, it is possible at least to harvest the sunflowers with some snow on the ground (unlike soybeans). Peanuts are 97% harvested vs. 95% normally. Winter wheat is 92% emerged vs. 89% normally, and with over 95% planted the planting progress is no longer reported (likely near 100% complete now). Conditions dropped 2% to 58% G/E, now behind the 62% rating last year at this time. With the strong rally into early November, Pro Ag recommended catch up sales of soybeans at $10.74 Jan futures on Wednesday, Nov. 12. We also recommended a storage hedge in corn at $4.05 July futures or better the same day, with corn trading above that level for a few days in mid-November. With a 2 billion carryout in corn and 450 mb carryout in soybeans still projected, these prices levels are decent considering the level of carryout expected. Pro Ag looks for grains to languish in the area of $9 to 10.50 the rest of the winter for soybeans, and $3.20-$4 for corn as well. The upside will remain limited due to the large stocks of corn and soybeans left as we complete harvest of what is a record large crop.