Content ID

168008

Trade Eyes USDA Data, Harvest Progress

Harvest continues with perhaps the best crop U.S. farmers have ever had, with soybeans likely to shatter previous record yields by a lot, and corn by a little. Today, after this is written, the USDA report will come out for October with its updates production numbers. The agency has two more reports to get it completely right, the November report and the final January report, so this is another step along the way.  

So the USDA monthly report today should show soybean yields expanding the most, and the corn yield number should stay steady. It will be interesting to see what USDA does to the yields, and also how they adjust demand (especially if they hike production in soybeans by 80 mb or more). Lately, if USDA raised soybean production much, they also raised demand enough to offset almost two thirds of the hike in production! Does that mean that China will buy whatever the U.S. produces? In recent years, it seemed that way. But perhaps the record-shattering U.S. yield in 2016 will test that theory a little more.

No change in recommendations: We continue to target the $9 November soybeans to remove some hedges. In corn, target removing hedges at $2.90 December futures. 

As we have stated before, it looks like we will have a record-large wheat, corn, and soybean crop in 2016 (as USDA is currently projecting). That means prices will be poor (as they are) while we bottom the market, likely during harvest. Typically, the lows come from October through January, and this year may be no different. Usually, bottoms last months while tops last minutes, so it might be a while before prices start to move higher. 

Weather forecasts the next 14 days now have the Lakes states at above-normal precipitation, so they may suffer a bit in bringing in the harvest. The rest of the country will enjoy below-normal precipitation, and all of the U.S. will enjoy above-normal temps, so that should accelerate the harvest a bit. However, yields are so good in corn that it will take some time to haul away a record-shattering crop yield.  

Crop progress numbers released Tuesday, October 11, showed the corn crop at 35% harvested vs. 38% normally, and soybeans 44% harvested vs. 47% normally. So we are just slightly behind normal harvest progress despite some warm weather in October that has brought good harvest conditions. Corn crop ratings stayed the same at 73% rated G/E, with the final Pro Ag yield model of the year showing a 175.5 bu/acre yield, which might be very near the final USDA yield number. Soybean crop conditions were also steady at 74% rated G/E, with that yield model staying about steady. But actual harvest yields are much better than expected almost across the country in soybeans, so that could lead to another hike in soybean yield estimates from the already record-shattering 50.6 bu/acre yield last month.

Winter wheat planting is 59% complete vs. 60% normally, with 34% emerged vs. 30% normally. Sugar beets are 38% harvested vs. 43% normally at this time, and sunflowers are 13% harvested vs. 12% normally. Sorghum is 48% harvested vs. 42% normally, with crop ratings dropping 1% to 65% rated G/E, still a high rating for sorghum. Cotton is 22% harvested vs. 20% normally, and ratings dropped 1% here as well to 48% rated G/E, 1% above last year.   

Soil moisture conditions across the country remain quite high, with topsoil moisture still rated 74% adequate/surplus, down 1% from last week but well above last year’s 59% rating. That means a good start to 2017 crops as winter wheat is being planted. Subsoil moisture is 74% rated adequate/surplus, also down 1% from last week but above last year’s 60% rating. So that means we could have a good start to 2017 as well.  
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