Frost Talk Is Real, Analyst Says
The corn and soybean crops in the U.S. continue to improve, with Pro Ag yield models rising to the highest levels of the year yesterday.
Both are now above trend yields, and both have made significant improvements in the past few weeks, as weather moderated in July and August, improving the yield potential of both crops.
Of course, USDA hiked soybean yields significantly over trend in the August report. So, we still have a ways to go to get as high as the August USDA yield projection for soybeans. Yet, at the rate of improvement this week (0.5 bushel per acre), it may not take too long to get there.
Crop conditions out yesterday afternoon (8/28) indicated another improvement in soybean crop conditions of 1%, now up to 61% rated G/E, with corn unchanged at 62% G/E. However, the yield models for both crops went up, soybeans more aggressively, with a 0.51 hike to 47.4 bushels per acre, the highest of the year and now above trend yields of 47.12. USDA is considerably higher at 49.4 bushels per acre, but with large hikes like this week, it is possible to meet or exceed the USDA number.
Corn yield was up 0.9 bushel per acre to 171.8 bushels, with advances the past six weeks of about 4.2 bushels per acre. That is going to apply some pressure to corn prices, as it did in overnight trade. Corn progress is slightly behind normal, with dough at 86% (1% below normal), dent at 44% (7% behind normal), and 6% mature (4% behind normal). Soybeans are slightly ahead of normal, with 93% setting pods (1% ahead of normal), and 6% dropping leaves (also 1% ahead of normal).
Although Monday's USDA crop progress report indicated that cotton conditions were up 2% to 65% G/E, heavy rain damage in Texas occuring this week will not be reflected until next week’s report. Sorghum conditions dropped 1% to 65% rated G/E, still a high number and equal to last year’s great crop rating. Sorghum is mostly behind normal development except heading (which is 1% ahead of normal at 91%), with coloring at 49% (5% behind normal), mature rated at 29% (2% behind normal), and harvested at 21% (1% behind normal).
HRS wheat is 76% harvested, 10% ahead of normal, but the northeast areas of North Dakota and Minnesota are struggling with a wet harvest. Oats harvest is 86% complete, 4% behind normal while barley harvest is 83%, 10% ahead of normal.
Soil moisture levels are mostly holding, with topsoil at 62% rated adequate/surplus (down 1% from last week), and down from last year’s 75% rating. Subsoil is rated 62% adequate/surplus, equal to last week but below the 74% rating last year at this time. Overall, we should have adequate moisture to help this crop reach maturity; we just need the growing degree days in Northern areas to achieve it.
Weather includes continued heavy rain in eastern Texas along the Gulf Coast, and spreading into Louisiana and Alabama. Also, some scattered rain is in Ilinois and Ohio, and also into the East Coast including Pennsylvania and the coast. The seven-day forecast calls for above-normal precip in the southeast U.S., including the Delta plus Kentucky and Tennessee. But the rest of the Corn Belt will enjoy below-normal precip along with the western U.S.
Temps will average below normal in the eastern Corn Belt and the southeast, with above-normal temps in the northwest Corn Belt and the western U.S.
The eight- to 14-day forecast continues to call for cooler temps in the eastern Corn Belt. In fact, it intensifies the cold air in the forecast for that region today.
So, well-below-normal temps are now forecast to occur in the northeastern Corn Belt and even into the central Corn Belt. The northern and western Corn Belt are still forecast to have warmer temps, from normal to above normal, as well as the western U.S. Precip in this morning’s runs is leaning toward below normal all across the Corn Belt, which is slightly drier than yesterday’s weather runs.
The cold forecast in the eastern Corn Belt is concerning. For now, that just represents below-normal growing degree days that will keep crop maturity well behind normal. But that is into mid-September, when cooler-than-normal temps don’t necessarily mean a frost threat. However, if this cooler weather pattern continues, it delays the maturity of the crop and puts it at more of a frost threat in northern areas once late September and October approach.
Eventually, the cool weather is going to produce a frost threat in these delayed crop development areas. There is significant crop behind normal development where yields can be trimmed significantly yet (especially for corn). That could be a factor as we get toward the end of September and the beginning of October – especially if the cool weather lingers that long.
Ray Grabanski is President of Progressive Ag Marketing, Inc., the top Ranked marketing firm in the country the past 8 years. See http://www.progressiveag.com for rankings and link to data from Top Producer Magazine and Agweb.com.
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.