There Will Be Crops Left Unharvested in 2019, Analyst Says
The past two months have been an awful period for farmers, as commodities prices have drifted lower and harvest season has been a struggle.
In fact, there will be a large percentage of soybeans and corn that will likely not be able to be harvested in 2019. Instead, a good deal of corn in Northern states will likely have to wait until the spring of 2020 to be harvested, while soybeans left over winter might not be harvested at all.
To add insult to injury, stock markets have rallied to new highs, with the DOW, S&P, and Nasdaq all setting new record highs almost daily while the commodities continue to struggle.
Actually the cold, dry weather the past few weeks has been a blessing for farmers in soggy northern areas, as the cold froze the ground hard enough to allow farmers to harvest a good deal more soybeans than otherwise would have been possible. The odds are usually not good to have that type of luck/blessing, but it was there for us in 2019. That helped farmers harvest most of the soybeans in ND, SD, MN, and WI. But not all of them. There will be unharvested crops in 2019, and that is going to lead to harvest losses much greater than factored so far into USDA numbers.
Weather forecasts continue to wax wetter for the next 14 days, with the next seven days now forecast above-normal precip in the western two-thirds of the U.S., and below normal yet in the eastern third. Temps remain above normal for the next week, but then turn cooler starting in the west and moving eastward (below normal in the western half in the eight- to 14-day).
Precip is above normal for the entire U.S. in the eight- to 14-day forecast, and it’s likely it will include significant snowfall in the northern Corn Belt. It’s likely that harvest will be over for parts of the northern half of the Corn Belt in the next two weeks.
Many say that with corn harvest 76% complete and soybeans 91% harvested, we should be about wrapped up in the U.S. by then. But that would be a bad assumption. Most of the corn not harvested never made maturity, and therefore is still very wet (25% to 35% moisture) and it is not economical to harvest now (and no propane is available to dry it).
Also, soils are so wet in some areas that it is not possible to harvest, either – or there is snow on soybeans and it’s not possible to harvest. For example, the 16% soys not harvested in ND is because most probably cannot be harvested. So, essentially the 14% we are behind normal harvest (84% vs. 98% normally) is because of the difficulty harvesting in 2019 – and we might not ever get them.
So, being behind normal national harvest levels 16% in corn and 4% in soybeans might not seem like a big deal. But what happens if you consider that most of that grain we are behind on might not get harvested at all in 2019? If 4% of the soybeans (at about 50% loss or greater left over winter) and 16% of the corn (at about 5% to 10% loss over winter) is added into the mix, we just lost 2% of the total soybeans and 1.5% of the total corn crop – which does matter!
We note that sunflower harvest at 47% (36% behind normal) is also big since most of the sunflowers are in the northern Plains (and will be snowed in next week). Winter wheat is 95% planted (equal to normal), and 83% emerged (86% normal) so that looks good, but conditions declined 2% to 52% G/E, indicating the crop is going backwards.
Still virtually no news on the Chinese-U.S. trade negotiations, which the trade is interpreting as negative (the lowest prices in two months for corn and sagging wheat/soybeans). Meanwhile, the DOW, Nasdaq, and S&P run to new all-time highs yesterday (and higher overnight). Yet, China continues to buy U.S. soybeans at a torrid pace. So, if we have been going down on a lack of an agreement, if we get a breakthrough, ag commodity prices could go up fast.
Ray can be reached at email@example.com.
Ray is President of Progressive Ag Marketing, Inc., a top Ranked marketing firm in the country.
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