3 Big Things Today, October 5
Corn, Beans Rise as USDA Expected to Lower Estimates
Corn and soybean futures both rose overnight on speculation that the U.S. Department of Agriculture will lower its yield and production forecasts for both crops in a report this week.
The USDA last month pegged corn production at 13.585 billion bushels and soybean output at 3.935 billion bushels. It’s likely that both of those projections will be lowered when the agency releases its World Agricultural Supply and Demand Estimates report on Friday.
The government also is expected to release its weekly Crop Progress report this afternoon. Cold weather has plagued some of the extreme northern Midwest, according to participants in agriculture.com's Marketing Talk.
Corn futures for December delivery gained 1 cent to $3.90 ¼ a bushel overnight on the Chicago Board of Trade.
November soybean futures rose 5 ¼ cents to $8.79 ½ a bushel overnight in Chicago. December soymeal futures fell $1.50 to $302.70 per short ton. December soyoil futures rose 0.39 cent to $28.45. Wheat for December delivery gained 2 ¼ cents to $5.15 ½ a bushel in Chicago. Wheat has rallied as of late due to hot, dry weather in major producers, including Australia, Russia, and Ukraine.
Report Week Likely to Bring Wide Price Swings as Investors Square
With WASDE coming out Friday, prepare for a lot of price action this week.
Investors will no doubt be squaring their positions based on whether they believe the USDA will raise or lower its estimates for corn and soybean yield and production.
Many traders and analysts believe the agency will lower its yield forecast for the crops that are currently being harvested. The government on September 11 said corn production would total 13.585 billion bushels on yields of 167.5 bushels an acre.
Soybean output was seen at 3.935 billion bushels on yields of 47.1 bushels an acre.
Commodity brokerage INTL FCStone, in a report last week, pegged corn production at 13.541 billion bushels on yields of 167 bushels an acre. The company forecast soybean output at 3.919 billion bushels with yields at 46.9 bushels an acre.
What will be fun to watch this week is yield results as they roll in from the harvest, which likely progressed nicely since there was some dry weather last week. (http://www.agriculture.com/news/crops/midwest-harvest-fecast-good-f-next-week_2-ar50545)
If farmers report better-than-expected yields, and USDA lowers its production forecast considerably, expect a lot of hand-wringing from growers, analysts, and farmers alike that the government can’t be trusted.
Little Rain Seen in Midwest Next Two Days
Little rain is expected in the next 24 to 48 hours, which will allow farmers to keep combines rolling. (http://www.agriculture.com/weather)
Rain may fall in isolated pockets of the northern Midwest, but dry weather is expected for a wide swath of the U.S. from Nebraska to Ohio for the next two days, according to the National Weather Service. Temperatures are expected to top out in the 70s, lower in Northern states. (www.weather.gov).
The U.S. corn harvest was 18% finished at this time last week and 21% of soybeans had been collected. The USDA will update crop progress in a report this afternoon. (http://www.agriculture.com/news/crops/usda-soybe-harvest-speeds-up-cn-slows_2-ar50459)
Winter wheat growers in the western Plains could see some much-needed rain early this week, which would improve prospects for crops that are going into the ground. About 31% of winter wheat was planted as of this time last week.
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