Let it be said that I was expecting a bounce in corn prices when the World Agricultural Supply and Demand Report was released at noon Oct. 10. It seemed we were poised for a report of slightly lower yields, lower production, and lower projected carryout. I was wr..,wr.., wrong.
Yield
USDA once again provided a surprise for the market and a drop in prices instead of a gain. The biggest culprit was in yield, where USDA raised the expected yield slightly, from the 168.2 bpa of the October report to 168.4 bpa.
This does not seem like much, but it was in the wrong direction. Trade guesses were for a one-bushel drop, with a guess as low as 166 bpa. The result was a drop of December corn futures of 14 cents, to 3.801⁄2. We had a low of 3.781⁄4!
But, just to make your head spin, the next day we bounced back 171⁄2 cents to a close of 3.973⁄4 on trade news.
China
President Trump announced a partial agreement with China that would include $40 billion to $50 billion in ag goods, far greater than the highest we had ever done in one year, at around $29 billion. The result was immediate.
Follow-through Oct. 14 gave us a recent December corn futures high of 4.021⁄2 before the Chinese said, no, just a minute, we want some more time. That thought has us back below $4 futures again, trading 3.941⁄2 Oct. 15.
The good news in the report on corn was that USDA is now projecting carryout at the end of the year at 1.929 billion bushels. This is certainly not bullish but is a 261 million-bushel reduction.
The bad news is that yield, which just does not seem possible. Last year in October the government projected a yield for last year of 176.4 bpa. So, we have gone through maybe the worst spring in the last few decades as far as planting, and we only will reduce the yields by eight bpa? This does not seem possible.
USDA now predicts a crop of 13.8 billion bushels. Farmers are now churning through the early-planted beans and corn. Yields are all over, but consistently near-normal yields in many areas.
The problem is, now we will start harvesting the June-planted corn and beans. It is hard to believe that we won’t see a huge difference in yield, but it is never safe to bet against the government numbers.
Soybeans
In the soybeans, USDA moved by one bushel, to 46.9. There are those observers who are really expecting 44 or 45. But that will not come out for a while, even if they are correct. The prediction now is for a crop of 3.55 billion bushels.
The good news is in the carryout, reduced 180 million bushels to 460 million bushels. This is a number that could eventually help the market.
On report day, November soybeans had a high of 9.34, but closed at 9.231⁄2, down just a fraction. There was an interesting range of over 15 cents.
The trade news Oct. 11 pushed November futures to a gain of 121⁄2 cents. The recent high actually came Oct. 14 at 9.451⁄2. We are off over three cents, at 9.371⁄4 Oct. 15 . This move puts us very close to the June 17 high of 9.401⁄2, after a low of 8⁄.151⁄2 in the middle of May and a low of 8.571⁄2 a month ago. So, we have seen a huge rebound.
Put me in the camp that says beans are overrated for yield. The June soybeans will have the advantage of better stands, but planting date will consign yields to the disappointing class.
Locally, the best of the early beans have been cut, but farmers are, in some cases, waiting for later beans to be mature, or waiting for the replanted portions of early fields to mature.
Corn
I hear of no corn being harvested, although I have seen a few fields that are all dried out.
I suspect that when the beans that can be run are run, some corn will be cut while the rest of the beans dry out. Weather has been terrific here, although in the Central Corn Belt there have been serious delays with three and four-inch rains.
We had light frost Oct. 15, and there are concerns that frost in the west did some damage over the weekend, especially to late soybeans. One report I heard was of killing frost in the soybeans clear south into Missouri.
