Market Movement … Maybe

Nov 02, 2023

Colton Voga
Grain Merchandiser

WE’RE FORMALLY ENTERING the second half of harvest, and we continue to see little to no movement in the markets. Corn has been trading marginally within that $0.02–$0.04 range, while soybeans are in the $0.04–$0.06 range. We continue to look for reasons why the markets should be moving. You have your traditional outlets, such as weather in South America, water levels for barge traffic, export sales and domestic production numbers across the country. We’ve also seen an increase in yields this year for both corn and soybeans. I would say that in the local market, we’re seeing anywhere from a 10–30 bushel increase. This, of course, all depends on whether or not you were able to catch the timely rains. However, nothing has been able to push the needle to get the markets excited. As we all know, these markets are not uncommon for this time of year. Year in and year out, we continue to see these typical harvest lulls.

What will it take to move the markets as we head into the winter months? I believe we need to pay attention to soy crush numbers, South American planting progress and export sales. The U.S. soybean crush jumped to the highest ever level for September, reaching 165.46 million bushels of soybeans processed (up from the 161.45 million bushels processed in August). That is a 2.5 percent increase! The previous September record was 161.49 million bushels set back in 2020.

When it comes to South America, we need to watch the planting progress for their first crop of corn and soybeans. It seems to be behind pace compared to the last two years, but nothing South America hasn’t seen before. Something worth paying attention to is the lack of rain in northern Brazil, which has led to the Amazon River being at near record lows. If these dry conditions continue, it could disrupt their shipping potential for the upcoming year. Although we currently see Chinese exports behind last year’s numbers, South American crop conditions and logistics could be a factor in increasing those numbers for the upcoming year.

I also wanted to give an update on Key Grain operations throughout our territory. As you’re driving around our locations, you will see that we have a good amount of piles this year. We have roughly 9 million bushels of corn in piles. We were able to avoid putting another 2 million bushels on the ground by adding extra sales via rail. We added an extra October unit train and some early single cars, which accounted for another 45 rail cars worth of corn. This has been a big harvest for us, which leads to long hours and stress on our operations team. I would like to note just how appreciative the Key Grain team is for all the hard work that’s been done. It literally takes everyone working together to be able to pull a harvest like this off, and we can’t thank our team enough. We hope you’ve had a safe and productive fall as you wrap up the 2023 harvest!

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