You are here

A Poor Start to Crop Year Ends Surprisingly Well, Analyst Says

For next year, stored soil moisture can be an important item.

Harvest is rolling forward, with most of the soybeans now harvested and over half the corn. As we move through harvest, we almost need to give thanks for the plentiful yields we got from a rather mediocre start to the crop season.

 While planting was just a bit behind schedule for many crops, the season was such that crops fell even further behind as the season wore on. Temperatures turned rather cool in August and into the first half of September for much of the nation, and then, just as normal frost threats would begin, temps turned warm and gave us another long fall. That was important, as that allowed crops to mature fully before the end of the growing season, allowing us to have an above-average final yield for most crops in spite of an auspicious start to the growing season.  

Now, we are harvesting the second-largest yielding corn and soybean crop ever (only behind last year’s record-shattering yields). Many were reluctant to believe the crop was that good, but indeed, as harvest rolled around, the grain did end up in the combine hoppers to prove the yields were actually there. It’s not often you can start as poorly as we did in 2017, and end up as well as this crop turned out.  We can thank God for nearly perfect weather from August forward for our plentiful harvest!

Now the supplies are largely known in the U.S., and attention will turn to demand for U.S. crops, as well as the developing South American crop. Today’s South American weather forecasts remain mostly favorable, with precip forecasts still calling for mostly normal precip in both Argentina and Brazil the next seven days.

Temps are forecast above normal for the northern half of Brazil, with normal temps in central Brazil and below normal in the southern quarter of Brazil.

Argentina will see mostly normal temps as well. The eight- to 14-day forecast has cooling temps back to near normal for most of SAM.  Precip in the eight- to 14-day period is above normal for the northern two thirds of Brazil, and about normal for the southern third of Brazil along with Argentina. Overall, this is an improving forecast but Brazil needs a lot of rain to replenish soil as it was a dry September for Brazil.    

The seven-day forecast for the U.S. is calling for below-normal temps in the northern third of the Corn Belt, and above normal for the southern two thirds of the Corn Belt. Precip is forecast above normal for the far west and the northern-tier Corn Belt states but below normal elsewhere in the Corn Belt. The eight- to 14-day forecast is calling for below-normal temps in the northwest third of the U.S., and above normal for the southeastern two thirds of the U.S. Overall, this is a relatively decent forecast to finish up the majority of harvest in the U.S.    

Harvest is progressing, although it remains behind average in most crops. Corn is 54% harvested, 18% behind normal while corn conditions remained unchanged at 66% rated G/E. Soybeans are 83% harvested, only 1% behind the five-year average. Cotton is 46% harvested, 1% ahead of normal while conditions declined 1% to 55% G/E. Sorghum is 59% harvested, 10% behind normal. Sugar beet harvest is near wrapping up, with 87% harvested, 1% ahead of normal. Sunflowers are 53% harvested, 1% behind normal.  Winter wheat is 84% planted, 3% behind normal while 65% is emerged, 3% behind normal. Winter wheat conditions are 52% rated G/E in the first rating of the year, but that is 6% behind last year’s rating at this time.  

Overall, crop development continues a bit behind normal, but the harvest is progressing and it looks like with current weather forecasts, it will be able to be wrapped up nicely (although perhaps a bit behind normal). For next year, stored soil moisture can be an important item.  But given soil moisture ratings for topsoil of 74% adequate/surplus (up 1% from last week and 3% from last year) and subsoil at 68% adequate/surplus (unchanged from last week and down 3% from last year), it looks like we’ll have a decent start to next year as well.

South American weather holds the next key to the grain market, but with improving Brazilian rain forecasts, we’ll have to wait for the next major weather threat to push the markets significantly higher. As U.S. farmers finish harvest of another successful 2017 crop, we can at least thank our lucky stars for the season to turn out as successfully as it did, as we dodged a lot of bullets during the season that could have made the crop much worse than we ended up with.

Ray Grabanski can be reached at raygrabanski@progressiveag.com.  
+++++++++++++++++++++++++++++++++++++++++++++++++++
Ray Grabanski is President of Progressive Ag Marketing, Inc., the top Ranked marketing firm in the country the past 8 years. 

This material has been prepared by a sales or trading employee or agent of 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.

DISTRIBUTION IN SOME JURISDICTIONS MAY BE PROHIBITED OR RESTRICTED BY LAW. PERSONS IN POSSESSION OF THIS COMMUNICATION INDIRECTLY SHOULD INFORM THEMSELVES ABOUT AND OBSERVE ANY SUCH PROHIBITION OR RESTRICTIONS. TO THE EXTENT THAT YOU HAVE RECEIVED THIS COMMUNICATION INDIRECTLY AND SOLICITATIONS ARE PROHIBITED IN YOUR JURISDICTION WITHOUT REGISTRATION, THE MARKET COMMENTARY IN THIS COMMUNICATION SHOULD NOT BE CONSIDERED A SOLICITATION.

The risk of loss in trading futures and/or options is substantial and each investor and/or trader must consider whether this is a suitable investment. Past performance, whether actual or indicated by
simulated historical tests of strategies, is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that Progressive Ag Marketing believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that advice we give will result in profitable trades.

Read more about

Talk in Marketing

Most Recent Poll

What condition are your crops?