I have always said that September is my favorite time of the year. Last week gave us the best that September has to offer, including a late-day trip to Welshfield to join the crowd on the patio at the Inn for Burger Monday.
It was an easy choice for eating, with the 45-minute drive to Burton through farm country colored with the early fall changes in trees and the fields turning to brown. Two brown fields of soybeans had combines running in them, the first of the season.
Those combines are stalled in the rain this morning. The other weather we are known for this time of year came back without forecast this morning to stop the harvest of the few fields that are ready.
Most beans are still dropping leaves, and some later beans are still solid green.
Steady harvest in central and in some parts of northern Ohio this last week killed the desperate premiums being paid by processors that were out of soybeans. Solid runs from Mansfield to Grafton kept our elevators busy.
Premium incentive
Farther west, the harvest is well underway. In Indiana, many farmers killed the beans with Paraquat in an attempt to add those $3.50 premiums to the recently lowered prices. Been a while since I have seen that. It used to be done locally to kill the green weeds in the dark days when the chemical weed control was inadequate and we didn’t want to wait for frost.
So, a hint of harvest teases local farmers, but now we are waiting for another stretch of good weather and crops that are more mature.
USDA reported Monday that 12 percent of the corn is harvested. That is one more than last year, but lag the average of 23 percent. The soybeans are at 10 percent harvested, just like last year. The five-year average, however, is 17 percent.
Prices slipping
In the meantime, prices continue to anticipate a huge harvest by going lower. We keep hoping the bottom is in on the charts, but then we slip lower.
The reason for low and lower prices, as we have discussed here, is the huge crops starting to come off in the Midwest.
We know the corn will be a new all-time record. The only question is, how big is the record?
At one time we thought we could have 14 billion bushels. Then, talk was of 14.4 billion. Now guesses are even higher than that.
Hold on
With no new usage on the horizon, we are now looking at huge carryover. That leads us to looking at historical prices with that kind of carry, and the results are frightening.
The plain truth is that farmers are willing to store because they are not hungry and the prices are cheap. However, there is no reason to believe that prices get better anytime soon.
The best we can hope for is a seasonal improvement. Usually, when prices are cheap at harvest, they improve sharply in two or three months.
Ethanol demand flat
The last few years corn acres and corn price increases have been fueled by demand by ethanol producers. Now that market is mature, and more plants are not being completed every month.
The cheaper corn prices of last year at the same time of high crude oil prices has provided the opportunity for the ethanol producers to make record margins. They are using those profits to pay off debts and store money for later. There is little impulse to build more capacity.
The handwriting is on the wall that they are making all the market needs. Once we got to ethanol enough for 10 percent of all gasoline to be ethanol, the demand curve dies. We have yet to see any real demand for E-85 nationally.
Wheat in planters
Winter wheat is now 43 percent planted, above both last year at 37 percent and the average of 36 percent.
The spring wheat harvest is at 94 percent, very close to both last year (95) and the average (96).
Today (Sept. 30) at noon we get USDA’s Quarterly Grain Stocks Report. This must be respected, because it can contain new fundamental news. However, there will likely be no reaction since there will likely be no surprise to the market.
