Grain Exchange – Weather Forecast Continues to Bring Optimism
A quick glance at the local 10-day forecast gives me optimism that there will be the weather windows needed to do what we look forward to all year, harvest grain. Wisconsin’s soybean harvest came in at 32% completed vs last week’s 15% while the 5 year average for the same time frame was 55%. For the US, the soybean harvest is at 46% completed vs an average pace of 64%. Wisconsin’s corn harvest sits at 7% completed and the 5-year average is 24%. The US is currently 30% completed vs a 5-year average of 47%.
Although crop progress was viewed slightly bearish, overnight markets made their way higher as traders say China has issued another 10 MMT quota of duty waivers for US soybeans. President Trump claims China has indicated that negotiations are advancing with hopes an agreement can be made next month in Chile. The Chinese Vice Foreign Minister said they have achieved some progress and the world wants the two countries to end their trade war.
Over the last few weeks as harvest has been delayed and some optimism has grown in trade, funds have purchased bean futures and a modest amount of corn and wheat. Although overall their position is viewed neutral, it allows for slight support of farmer selling as harvest moves slowly and business decisions are made in the spot market. It is important to always keep in mind breakeven and de-risk when possible/profitable. This year handling the crop will incur greater cost with extra drying, trips to town and most importantly quality management. With the possibly of more discounts/costs in this crop making timely sales will be as important as ever.