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Harvest of corn has begun, with 4% of the corn harvested (mostly in southern regions), which is behind the average pace of 10% normally done at this time. However, harvest yields in southern areas is better than expected, especially since little rain was received in these areas after July 20. The yields are, in some cases, four times larger than last year's drought affected crop. So it's becoming obvious that Southern areas will need to have yields revised upward from last week's 155.3 bu/acre forecast from USDA.
Soybean harvest is also near beginning in Northern areas (where soybean harvest starts first), as North Dakota soybeans are losing leaves and maturing quickly. USDA says now that soybeans will yield 41.2 bu/acre, only slightly larger than last year, nationally. However, North Dakota soybean yields are forecast to be 15% smaller than last year (29 bu/acre vs. 34 bu/acre last year). Minnesota yields are forecast to be 10% smaller than last year at 39 bu/acre vs. 43 bu/acre last year. We will see how close USDA numbers are to reality in a few weeks. Rain recently has shored up yield potential, as most of the Corn Belt received rain last week and is forecast to get more this week (85% coverage of .25 to 1 inch; local 2-inch rains this week).
Crop conditions yesterday afternoon 9/16 declined 1% in corn to 53% G/E and declined 2% in soybeans to 50% G/E. The Pro Ag yield models also showed declines, with corn a meager 0.5 bu/acre to 160.6 bu/acre, and soybeans a more aggressive decline, percentage-wise, of 0.47 bu/acre to 43.14 bu/acre. These are still well above USDA numbers of 155.3 bu/acre corn and 41.2 bu/acre for soybeans. But we note that the two yields are coming closer together as we near maturity of both crops, and we also note that yield declines are slowing. Pro Ag yield models now suggest a corn crop just slightly above trend of 157.4 bu/acre, but slightly below trend for soybeans of 43.6 bu/acre. Overall, it looks like a relatively average crop of both corn and soybeans now. Note that with recent and forecast rains the decline should slow further or even stop, and the fact that crops are nearing maturity might mean the end of the season shortly. Already, we lost the date year 1988 in corn due to advanced harvest at that time.
Maturity of crops is advancing, with corn now 4% harvested vs. 10% normally, and 97% of corn in dough stage (equal to normal), while 81% is dented (vs. 86% average) and 22% mature (vs. 41% average). Soybeans are 26% dropping leaves (vs. 35% normally). We note that HRS wheat harvest is 90% complete (vs. 87% normally) and barley 96% complete (vs. 90% average), so small-grain harvest is virtually complete. Sorghum is rated 54% G/E, same as last week, and is 32% harvested vs. 29% normally, 37% mature vs. 40% normally, and 79% coloring vs. 76% normally. Winter wheat is 12% planted, equal to average, and the rains this week will greatly aid the development of winter wheat, including germination and planting into good seedbeds. We also want to remind growers that HRS yields will be hiked in the Sept. 30 report for final small grains, perhaps as much as 10% or more since harvest was surprisingly large with yields.
Look for further selling as harvest commences, with yields likely to be better than expected. We could still see a record-large corn crop if frost holds off and crops finish with moisture allowing proper fill of late-season crops (which is forecast). Soybeans may also yield better than expected: There were only four weeks this 2013 crop was under stress, although it was a critical time. (Stress ended this weekend for many areas.) Pro Ag remains bearish, Final Pro Ag downside price targets are still $4 Dec corn, $9.50 to $10 Nov. soybeans, and $6 CBOT wheat.
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