Prices were lower again for corn and soybeans, over the past week, while wheat prices were firm. Concrete news is still lacking, so prices remain within recent ranges. Corn and soybeans are both about 35 cents below their October highs, while wheat challenged its Oct high.

 

Rumors that the China/US trade deal wouldn’t be signed this calendar year didn’t help sentiment. Market participants are getting tired of all the rhetoric, without any real results. This is likely why soybean prices are showing the most weakness.

 

Corn harvest as of Nov 24 was 84 percent complete, below the normal of 96 percent for that date. That means there are still over 2 billion bushels out in fields. North Dakota is by far the furthest behind, with only 30 percent in the bin.

 

Many of those unfortunate farmers got hit with a frost before the corn was mature. Their moisture levels are very high, and test weights are very low. Heavy discounts are the result, with some reports of farmers receiving only $2.00/bu.US after drying.

 

Ontario is also experiencing some of the same in many areas, although not nearly to the extent of the US Northern Plains farmers. Harvest progress remains slow in many areas, as fields are wet, and moisture levels in both corn and soybeans remain too high.

 

On the demand side, corn exports remain slow. Export sales are at their lowest level since 2012, when prices hit record highs. Demand for corn for ethanol will likely end up 150 miln bu. less than the 5.425 bln bu. USDA is estimating.

 

Soybean exports are a different story, however. Last week, the US exported 1.943 mln mt of soybeans, the largest weekly total in 2 years. Of that, 1.35 mln mt, or nearly 70 percent went to China. The US is currently the cheapest source of soys.

Chicago Dec. soft red wheat closed at 5.30 today, not far from its Oct high close of 5.32. Meanwhile, Kansas hard red wheat closed at 4.33. The 97 cent discount is the highest in 12 years. Chicago wheat is also at a 26 cent premium to Minneapolis spring wheat futures. This is very rare.

 

Current prices for the soft red wheat Ontario farmers planted this fall are $6.50 per bushel. With much of the crop looking decent as we head into winter, taking some risk off the table on any further rally may be prudent.

 

If and when the spreads between the different classes of wheat realign to more normal levels, the greatest pressure would likely be on soft red wheat prices.

 

Frank Backx

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