It's crop estimate season
The final days of this week mark the beginning of crop estimate season, that cycle of crop size estimates done by private firms and the USDA.
First up to the plate, as usual, will be FCStone. Others will follow, with the USDA report on Monday, August 12. The cycle will repeat beginning on the 1st of September, October, and November.
The market seems to be contemplating smaller yields than the Outlook Board released in the July supply/demand reports, primarily due to the dryness in the western half of Iowa, as well as parts of Nebraska, Minnesota, Missouri, and Illinois.
Perhaps, like the story of Goldilocks and the Three Bears, the expectations can be summed up as “not too big, not too small, but just right.” Just right, in this case, would be large enough to support larger demand and grow carryouts. The rationing type situation of the past two years appears to be in the rearview mirror.
Acreage may still be the main unanswered question this year. Private analysts will generally use USDA numbers. NASS (the part of USDA that does the crop report) said they would resurvey for soybean acres in several states due to late planting, so bean acres could be slightly different. It will be October before the USDA reconciles its acreage with the numbers reported to the FSA and the RMA.
No matter how frustrating it may be, the August crop estimates will be the center of attention for a while. The market will welcome this opportunity to come to grips with how this year’s weather has affected yields. The more information, the better!
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