Grain Markets Update

By Rich Cole, Grain Manager

 

Corn quality and railroad performance have been the two main features in the grain world lately. Robust corn exports off the PNW has created a much needed and welcome demand boost, along with some basis opportunity; but all the demand leaves us prone to railroad performance. The snow and cold temperatures that occurred along the PNW corridor in February hampered BNSF movement, slowed them down considerably, and spiked car values. This created a logistics knot that has taken quite a few weeks to untie and pushed back loadings at our elevators as we waited for cars. Recently, the BNSF has finally started catching up and has been pushing in train after train close together, making it quite a challenging situation at our locations.

Quality is the next big issue this year that we are struggling with. Early this winter it seemed the cold temperatures were causing the corn to crack and break but as the weather has warmed up we are still dealing with high amounts of FM. Perhaps this is related to growing degree days, the maturity of the corn, or maybe the speed of drying. Regardless of the reasons for it, we are continuing to struggle with quality and have a big book of trains yet to load in the coming months. We have taken discounts on everything from grades to screenings generated to demurrage on trains as loading has taken considerable effort. We appreciate your understanding and effort also as we’ve gone from sitting full waiting on trains to taking deliveries on extended hours to get these trains loaded.

From a market point of view, next up is the March 29th acreage report. Trade guesses are for the U.S. to plant more soybeans than corn for the first time in over 30 years. Time will tell what the actual numbers will be but it is certain to cause some volatility in our already volatile markets. Planting season is right around the corner and we want to wish everyone a safe and productive spring!

 

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