The last blog of the decade for myself, I hope all of you had a wonderful Christmas celebration. This week is usually a week known for very little or extreme price action as the volume of trades is always light and prices can move a lot with a big order or not move at all with no orders. For the week I would put this week in the extreme price category with soybeans up 39 cents and corn up 8 cents in the first 2 days. Fundamentally, traders are talking about a superb South American corn and soybean crop shaping up but concerns over the final production numbers of our crop. Traders are trying to estimate how many actual bushels of corn will be lost due to what's out there and how bad the latest snow storm was. Numbers I have seen thrown out are between 200-250 million bushels lost. If so, and keeping everything else equal, our carryout for this next year would drop from 1.6 billion to 1.3-1.4 billion. Funds are estimated long 222,000 contracts of corn, 97,000 contracts of beans and short 22,000 contracts of Chicago Wheat.
Basis levels on corn reflect the poor demand nearby and the urgency to move this below average quality crop sooner rather than later. Please make sure to check bins as we have heard of centers getting warm even in this cold weather. Soybean basis has bounced back nicely to reflect the huge nearby export demand, which has forced processors to also keep pushing for stocks.
Happy New Year!!
Scott Meyer
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