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Update for September 23rd, 2022

U.S. Corn and Soybean GD/EX Ratings Decline and U.S. Corn Price Highest in the World

Another weekly crop condition report and another decline in the corn, falling by 1 percentage point down to 52% GD/EX. Harvest is running slightly behind trade expectations with a total of only 7% complete vs 5% a week prior and the 5-year average of 8%. Right now, the only state that is running ahead of their average harvest pace is Kansas which has completed 27% of the corn crop vs the norm of 17% harvested by this date.

There are so many important market influences taking place around the globe that right now it seems like a tug-o-war between issues and it’s impossible to guess which will out-weigh the other. One factor we do know though is that U.S. corn is the most expensive on the market amongst any of the other major global exporters. (Reuters comparison chart shown below) Total commitments right now are the 7th best out of the past 10 years even with Chinese purchases down drastically, its likely our high prices are the limiting factor.

U.S. soybean GD/EX ratings also fell by 1% this week down to 55%. Harvest is running behind normal pace, currently 3% of the nation’s soybean crop is harvested vs the 5-year average of 5%. The Argentine government recently started a new program that gave farmers in the SAM nation the incentive they needed to finally begin marketing their harvested soybean crop. This new Argentine program has been a headwind for U.S. soy exports but weather outlooks for the nation show the potential for some weather issues which could mean we will see more export business return to the U.S.

Early planting in Argentine is being met with less-than-ideal conditions. Many farmers that are attempting to plant their crop are at doing so in severe drought conditions. September has been dry in key growing regions just like conditions were in July and August. Argentina is the world’s 3rd largest corn exporter behind the U.S. and Brazil but they are the top exporter of soybean oil and soybean meal so any production concerns are important to watch.

The lack of available inputs around the globe could play a big role in long-term commodity price action. Rising costs, limited supplies of natural gas and other energies may cause fertilizer plants across Europe to shut down. These plants are in addition to the cutbacks recently announced in the UK, Lithuania, Hungary and Poland. Yara announced 2 weeks ago that recent reductions in production in their European plants will reduce ammonia availability used in all nitrogen fertilizers to just 35% of normal levels.

This week has been a temperature roller coaster. High temps varied by as much as 30 degrees in just 24 hours.

Both the EURO and GFS are in sync in regards to the very quiet pattern that is forecast over the entire Midwest through October 6th. Little to no rainfall is predicted during the period.

Fiona is a massive hurricane with Cat 4 winds in excess of 100 mph and a storm surge of 6-8 feet. The current expected path of the storm will bring it into the coast of Nova Scotia this evening as the strongest storm in Canadian history delivering with it extreme impacts for Nova Scotia as well as Newfoundland.

The energy from the storm is expected to cause a deep trough over the U.S. Great Lakes region which will draw colder air into the Midwest Monday night. By mid-week scattered frost is possible in some areas.

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