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Investors Digest Crop Tour Estimates, Analyst Says
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.
If you have questions or comments, contact Top Farmer at 1-800-TOP-FARM, ext. 129, or ask for Bryan Doherty.
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