The cash markets remained relatively stable this week posing slight gains of an average of 1 cent per bushel.
This week Spanish energy firm Abengoa sold 5 of its Ethanol plants to Green Plains Inc. of Omaha, NE. There have not been many indications how this will affect ethanol basis in the short term. Ethanol plants regained last week’s losses gaining 1.5 cents. Corn basis along the river saw marginal gains of 1 cent per bushel. Nationally however, corn basis was down almost half a cent per bushel. This is the third week in a row corn basis has went down.
Soybeans have been a different story. Soybean demand remains high and analysts expect strong demand to continue despite the lower prices and strong yield potential. Basis at river terminals is most indicative of the strong demand and saw gains of 7.5 cents per bushel. Crush facilities saw basis gains as well, gaining almost 1 cent. Nationally soybeans gained 1.5 cents per bushel.
Grain futures were down this week following strong yield prospects from the Pro Farmer Crop Tour. Corn lost 8.5 cents, soybeans down 39 cents and wheat fell 26 cents.
The Pro Farmer crop tour observed above average soybean prospects in southern Minnesota, which is in line with last year. Soybean potential in eastern Iowa looked on par with recent years. Pro Farmer scouts projected Illinois’ corn yield potential sharply higher than last year but the estimates trailed USDA’s record-large forecast. They predicted average corn yields in Illinois at 193.50 bushels per acre, up from 171.64 bpa last year and the three-year crop tour average of 179.69 bpa. The outlook was below USDA’s August 12th estimate of 200 bpa, which if realized would equal 2014′s record average yields in the state. Soybean pod counts in a 3-by-3 foot area were calculated at a statewide average of 1,318.09, up both from 1,190.47 pods in 2015 and the three-year tour average of 1,201.87 pods.
In world news, the French corn crop remained stable last week. After two weeks of decline data from farm office FranceAgriMer showed on Friday suggested dry summer weather was having an effect in the European Union’s biggest grain producer. Some 63% of the crop was rated good or excellent as of Aug. 22, unchanged from a week earlier.
The recent slide in the US wheat price and losses in the US dollar, combined with a move higher in Ukrainian prices has put the US in a better competitive position. Last month, Ukraine wheat prices were $17/MT lower than the US and today’s values are on par with each other.
The International Grains Council on Thursday raised its forecasts for both world wheat and corn production in the 2016/17 season. The IGC projected world wheat production in 2016/17 at 743 MMT, up from a previous forecast of 735. World corn production in 2016/17 was seen at 1.030 billion tonnes, up from a previous projection of 1.017 billion.
Crude started to regain strength after Monday’s losses of more than $1 a barrel using some of Thursday’s momentum to continue higher today.