Corn Soy split

The Sept. 30 USDA stocks report rocked the market temporarily, but after a few days traders focused their attention back on this fall’s harvest.

There are a couple of things to keep in mind when looking at the markets this fall, according to Karl Setzer of Agrivisor.

One is that the market continues to tell farmers to sell their soybeans now and to sell their corn next spring or summer. That is in large part due to the fact that China is buying U.S. beans and there is simply a better overall demand for beans in the world this fall.

Setzer says farmers need to remember, though, that just because the market is telling them not to deliver corn until next summer does not mean they should not sell them now for delivery next summer. A carry in the market to pay for storage does not necessarily translate into “sit on corn and do nothing,” Setzer says.

And he says some farmers may be challenged by that market message because they could have corn coming out of the field this fall with quality problems. Those producers may be forced to sell this fall or early winter as a way of dealing with quality issues.

When it comes to soybeans, Setzer says planting in Brazil was only 1.6% completed this week, compared to about 4.5% at this point in the last five years and an average of nearly 10% over the last 10 years. That slow planting pace could potentially mean that international buyers such as China will buy from the United States for a couple weeks longer in January if the South American harvest is delayed.

On a practical level, Setzer says China is well-known for sometimes over-buying and then cancelling contracts. This could mean there would be fewer cancellations of January contracts. Either way, it could help U.S. soybean farmers.

He says early harvest numbers indicate that it could be a good soybean harvest in the United States, and traders will be watching those numbers closely.

Gene Lucht is public affairs editor for Iowa Farmer Today, Missouri Farmer Today and Illinois Farmer Today.