USDA released the Sunday night Crop Progress Report Monday after the close, and it was not pretty. Harvest still drags on, and rain coming into the Midwest this week will not help.
Thanksgiving will come and go with corn, and even soybeans, still in the fields.
One of the biggest traditions of my youth was that we gathered for a noon Thanksgiving dinner, and then piled on the Carhartts for one more push with the corn picker.
This was in the Dark Ages, when we thought planting corn by the end of May was OK, and picking 250 acres of corn with just a two-row corn picker was high tech! It was, if you remembered opening fields by hand and picking corn into flat wagons, then shoveling them over your head into wooden slat cribs.
I remember the first elevator, and the first time I saw silage wagons with a winch on the rear that pulled most of the corn off the wagon. Pardon me, I have slid directly into geezer mode.
Market psychology
The delayed harvest is the biggest reason for some volatility in the markets that set new benchmarks for the period on Monday’s trading at the Chicago Board of Trade.
December corn futures traded over $4 and January soybean futures bested $10. These are huge psychological numbers, and represent a significant bullish mood in the markets.
The move is being described as “short covering.” This means traders had sold the market short, anticipating harvest catch-up and record crops of beans and near-record crops of corn.
In fact, the market slogs on, still worried about the harvest and harvest losses of yield and quality.
The end-of-day reports would be thought to encourage the market overnight, but the big news is that it went down, with corn and beans both off nearly a nickel. The December corn is now back below $4, but the soybeans hover just above $10.
The overnight correction would reflect that the harvest progress numbers were not really as bad as what some traders feared, and that they were already “in the market.”
Looking at the reports we see that the nation as a whole is up to 54 percent planted. That is up from 37 percent, but is sadly behind the 77 percent of last year and the five-year average of 89.
Ohio has wet corn
Ohio is slightly ahead of that, but only at 58 percent. I would not have been surprised if the number was 70, with the good weather we had locally, but there are a lot of acres to go.
Our harvest is being slowed by wet corn. Farmers are reporting to me that the corn is wet enough that they can only shell for half a day before they run out of dryer capacity.
Iowa has caught up to our pace and reports have them 59 percent done, a gain of 25 percent for the week. Illinois is similar to us, at 52 percent, but gained 19 percent.
The nation’s bean harvest still lags at 89 percent, with a 96 percent average. So, this might be Turnaround Tuesday for the bulls, with the overnight pointing to lower markets.
Vomitoxin specs
Adding to the negative news is the CBoT deciding to put a vomitoxin specification in the corn contracts. There is so much high-vomo corn around from this delayed harvest and cool summer that the board is worried it gets delivered to Chicago.
Three years ago the board did the same thing to wheat and it contributed to a lack of convergence between cash and futures prices. Expect this to contribute to lower basis in the country.
