AM Comments 10/11/16
Tuesday, October 11, 2016, 1:10 PM
Submitted by: Dustin Weiner
For the most part this morning our markets are steady to a little firmer as the trade waits for tomorrow’s USDA S&D reports. This afternoon we will get the (delayed) look at the crop progress report. The market expects US soybean harvest to be around 45%-50% complete and the US corn harvest to be around 35%-40% complete. Both of these would be a little behind average but with a decent looking forecast in front of us – catching up shouldn’t be hard.
There are quite a few stories hitting the wires about storage space across the corn belt (particularly northwest and northeast) becoming very tight. It sounds like temporary (pile) space is being used in parts of the country that aren’t accustomed to doing so. In spite of this, the cash markets (read: basis levels) are holding in there “OK” so far, showing just normal seasonal weakness with some of the credit going to cheap freight, both rail and barge. Cash traders are aware that when corn harvest gets over 75% complete, corn could become difficult to buy as farmers and commercials put it under lock and key due to flat price and good carries. This fear could also be helping keep corn basis from slipping too far. Of course, the US harvest today isn’t even half-done, meaning there is still downside risk in basis as bins continue to fill up and grain gets dumped on the market.
Have a great day!
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