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Investors Digest Crop Tour Estimates, Analyst Says

It’s still a weather-driven market.

Two major private crop estimates for the 2018 season were released last week. One tour estimated the national average corn yield at 174.99 bushels per acre, and a national soybean yield at 50.67 bushels per acre. The other tour estimates came in at 177.3 bushels for corn and 53 bushels for soybeans. These private estimates compare to the August 10 USDA report, which estimated corn yield at 178.4 and soybeans at 51.6 bushels.
 
It was really no surprise that last week’s private crop estimates were a confirmation of big crops, and not substantially different from the USDA’s estimates. Over the years, private estimates seem to vary little with the August USDA figures. While neither measured up to the USDA’s yield forecast for corn, one tour estimate offered a bigger bean number. Both reports found spotty yet generally very good crops. As results were released throughout the week, the market focus turned to the higher yields, as prices began to slide early this week and continued downward.
 
The question now: Are the August USDA estimates the largest for the year?
 
Only time will tell how big the crop actually is or isn’t, and this information will come through harvest results. Last year, the corn crop continued to grow into the fall months. Harvest results had the USDA revising yield estimates upward during September, October, November, and January, by nearly 6 bushels an acre. Soybeans, on the other hand, lost nearly .5 bushel during that same window. Some are suggesting that, where both crops have crop ratings of 10% or more in the poor to very poor categories, we will eventually see more impact. This could mean lower final yield numbers. That may be the case, yet it’s likely, as of this writing, that the prospects for large crops is almost certain. Unless weather does something drastic in the weeks ahead to affect the final outcome, the market will view this year’s inventory as ample. Consequently, prices will struggle into harvest. A likely retest of contract lows for soybeans ($8.26 November futures) should not be a surprise, as recent rains benefit the crop even further and likely fulfill the Pro Farmer Tour estimate of near 53 bushels an acre.
 
We’re still in a weather-driven market, and almost anything can happen to prices. Determine your plan of action. Being proactive in putting strategies into place for any market action can go a long way toward your final price.

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Carol Tillmann Front Desk Administrative Assistant | Stewart-Peterson Office: 800.334.9779 | Fax: 262.334.6225 ctillmann@stewart-peterson.com
www.stewart-peterson.com
 
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. Hypothetical performance results have many inherent limitations. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. No representation is being made that scenario planning, strategy or discipline will guarantee success or profits. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. Reproduction of this information without prior written permission is prohibited. This material has been prepared by a sales or trading employee or agent of Stewart-Peterson and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Stewart-Peterson. Stewart-Peterson refers to Stewart-Peterson Group Inc. and Stewart-Peterson Inc. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of National Futures Association. Stewart-Peterson Inc. is a publishing company. A customer may have relationships with both companies. Accordingly this email is sent on behalf of the company or companies providing the services discussed in the email.
 

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