Weekly Market Update With Lilja, Progressive Ag

There is an old saying in the grain trade: “big crops get bigger.” Farmers and traders often lament at fall USDA report numbers that come in and continue to increase to the stockpile. But the opposite is also true as the other saying is “small crops get smaller.” In 2020 small crops are indeed getting smaller. Despite better genetics and better farming practices mother nature still has the final say. 2020 reminded us that hotter August temperatures and early September frosts can drastically cut into yields.

The USDA lowered ending yield numbers for both corn and soybeans in its November 10th monthly supply and demand report. US corn yields were 2.1 bushels lower than trade expectations cutting production to 14.5 billion bushels and reducing

2020/21 ending stocks from the October report by 465 million bushels. Corn exports were also increased 325 million bushels. Soybean yields were reduced to 50.7 bu/ac with production of 4.170 billion bushels and an ending stocks estimate of 190 million bushels!!! There

were analysts in August stating we could have over 600 mb!! The largest changes in world numbers were an 8.0 MMT reduction to Ukraine corn production and a 2.5 MMT reduction to Argentina soybean production. Each of these cuts accounted for a majority of the reduction in overall world numbers from the October report. Not

surprisingly after numbers like these, corn and soybean futures were sharply higher. The market rally continues as the crop of 2020 continues to get smaller.

US and world wheat numbers didn’t materially change from the October report but the market remains concerned over Black Sea Region weather.

Strong La Nina pattern years tend to be drier for Russia. This would lead to less snow as an insulator and more chances for winterkill. It has obviously been dry so far and there is a cold snap heading that way late this week. 1/3 of the wheat area may not get a long enough warm stretch to help with root development before it goes into dor

mancy. The heightened chances for winterkill are real. Ukraine winter wheat is 92% planted with its weather bureau reporting a majority of the crop as good to satisfactory condition after they caught some recent rainfall.

Progressive Ag Marketing, Inc. and is, or is in the nature of, a solicitation. This material is not a research report

prepared by Progressive Ag Marketing’s Research Department. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions.