Closing Comments; Tuesday, November 26th, 2019

Corn, soybeans, and wheat were all on the negative side today as buyers backed away from the market. Fundamentally, nothing much has changed this week, which is some of the problem. Trade continues to search for fresh news, and without it, futures continue to struggle. We have seen technical buying surface, but this has been sporadic. Holiday and end of month trade are impacting market movement as well, with volume being quite low this week.

Last night’s harvest progress report showed a considerable amount of this year’s crops still need to be collected. According to USDA data, the United States still has 13.08 million corn and 4.5 million soybean acres to harvest. This leaves 2.19 billion bu of corn and 212 million bu of soybeans yet to harvest. There are now thoughts that some of these bushels will be lost and not harvested at all.

The greatest concern with the unharvested acres in the United States is the winter weather moving into the Midwest. Heavy snows are predicted over the next week, with blizzard conditions expected in some areas. Not only is heavy snow expected, but high winds as well. This will easily cause at least some loss of production, and possibly quality issues as well.

The quality issues with this year’s corn crop are starting to build. The greatest is with test weight as some of this year’s corn is struggling to top 50 pounds per bushel. As a result, some farmers are seeing discounts of nearly 20 cents per bushel. Higher foreign material is also being reported this year, which has added to potential discounts. The greatest concern is that some corn buyers are simply rejecting corn rather than take in low quality bushels.

Basis values are starting to reflect the tightness in high quality corn. Basis remains stronger than usual as buyers try to encourage corn movement. An uptick in export basis is also supporting interior corn values. Soybean basis is strong in the interior market as well, as farmers are either focused on finishing corn harvest, or willing to pay storage rather than sell at current values.

Sources in Argentina are reporting what they expect to see for export tax changes when the new president takes office in December. Thoughts are Argentina’s export taxes will increase to 35% on soybeans and to 15% for corn and wheat. The country’s export taxes are a current 18% on soybeans, 4% on corn, and 7% on wheat. The country has started to struggle financially since taxes were cut by President Macri, and these changes will generate an expected $2 billion in revenue.

Much of the global weather interest right now is on South America, but there are other regions suffering from abnormal conditions as well. One of these is the Black Sea where wheat production is starting to be impacted. Another is South Africa, where corn and sorghum output has been jeopardized. Analysts in South Africa believe corn production has been cut 10% from drought. This has the official crop estimate at 11.26 million metric tons, and generated ideas that food supplies may be affected if it drops any lower.

A portion of today’s negativity can be attributed to the ongoing uncertainty of a trade deal with China. While both sides claim progress is being made, trade still wants concrete proof, in writing. Not even the recent export sales we have seen to China are easing worries a deal is not going to be finalized. Skepticism increased today when the US announced that even if a Phase 1 agreement is reached, a Phase 2 deal is unlikely.

This commentary is the sole opinion of Karl Setzer, Senior Commodity Risk Analyst for AgriVisor, LLC. This is intended for informational purposes only and not to be used for specific trading recommendations. The information used to generate this commentary is gathered from a variety of sources believed to be accurate. If you have any questions or would like additional market information, feel free to send an e-mail to


Market Commentary provided by:

Karl Setzer Grain Commentary