Farmers are poised to enjoy a bountiful harvest this year, but it won’t come without concern. Feed and Grain Magazine Editor Elise Schafer says grain will have competition on the railway this year where problems persist in areas like the Upper Midwest. Some farmers are still trying to move last year’s crop.
That’s because grain is competing for rail cars, locomotives and track space with the oil industry and so far it seems like the railroads are favoring the oil customers. The grain industry is putting a lot of pressure on the railroads to clear the backlog of railcars from the winter. The railroads are saying that they’re going to make significant investments to avoid this kind of problem going long-term, so we’ll see how that pans out.
Near the Upper Mississippi River a late and wet harvest is causing quality concerns. Schafer says grain handlers will be testing loads for quality and may have to eventually turn away loads. However, she says grain handlers are preparing for the large harvest.
Grain handlers are well-prepared to take on the extra volume. All summer they’ve been watching the crop reports and elevators and co-ops are investing in permanent storage and temporary storage solutions. A lot of them have set up circle or oval ground piles and those can store up to a million and a half bushels. It does depend on the region and the situation but most places in the Midwest are pretty low on inventory right now. So at least at the beginning of harvest, they should be accepting grain.
Schafer says farmers should be talking with their local co-ops and elevators about grain storage, planning ahead to avoid problems. She adds one solution to on-farm storage is plastic grain bags.
It is fairly expensive and labor-intensive, but I’ve heard high-quality grain coming out of grain bags even a year after they’ve been loaded. The key is to load them dry. You want to decrease the possibility of mold or mycotoxins once it’s loaded so you need to monitor them constantly. Be sure to get a good sample for testing once you’ve unloaded it to help determine the quality and then you can decide how you want to market it.
Today we discuss a futures market which continues to grind lower and a cash market which has seen increased volatility as harvest looms. If you haven't taken a look at our mobile trading app, now is the time! Visit us at GrainHedge.com and get live quotes.
Corn and wheat futures both traded higher in Chicago today, something we have not seen in quite some time. Today we discuss ethanol production, export sales projections, and tenders in the wheat market.
Today we discuss a very quiet trade day in Chicago and where the bottom could be for corn and soybeans. Weather next week could provide some slow down to corn and soybean harvest as wide spread precipitation is expected.
Corn and soybeans showed stronger export sales than expected, while wheat missed expectations
U.S. grain futures slipped lower over night with corn trading down 2 cents, soybeans off 2 cents, and Chicago wheat down 5 cents.
This morning’s export sales report showed strong sales for U.S. corn and soybeans while wheat missed expectations. Soybean sales were reported at 1.466 mill tonnes, just above the high end of expectations. China was the largest buying accounting for a third of reported sales while 1/3 went to “unknown destinations”. Corn sales were reported at 659,000 tonnes which was in-line with strong expectations for the week. Wheat sales came in below expectations at just 314,000 tonnes for the week. This was down 15% from the previous four week average.
Outside markets and currencies will be watching the Scottish independence vote today. Scotts will vote whether to separate from the United Kingdom and establish a sovereign state. Results will be tallied late this evening so any volatility will most likely be seen during Friday’s trade session. Most analysts agree that a strong knee-jerk reaction from equities and currencies is likely but the long term impacts should be minimum – regardless of the votes outcome.
Our weather models continue to show temperatures above normal through the end of September. Frost/freeze threat remains very low and will not be a supportive story in the grains for a couple more weeks.
Today's Federal Reserve meeting pushed the dollar another leg higher as the fed announced plans to raise interest rates more aggressively in 2015 and 2016 than projected in June. We discuss currencies, ethanol production, and export sales on today's show.