December corn futures gained 9 cents in the last five minutes of trade Monday. Traders seemed to be reacting to fears of lack of harvest progress.
USDA released new harvest numbers after the close that seemed to confirm the bullishness.
December futures had a 24-cent range from high to low Monday. We had a spike high 10 days ago (Oct. 23) at 4.13-12 December futures, but a low Monday of nearly 3.59. The high, just before the close, was nearly 3.84.
November soybeans had a 44-cent range, posting a 10.06-14 high. We were back to 9.89 when the overnight session closed, but that was more than a dollar above the Oct. 5 low of 8.78-34.
Prices have been volatile lately, and much of the bouncing around has to do with the deferred reality of the record bean crop and near-record corn crop we are trying to bin.
Slow going in fields
This week again we made little progress on the harvest, and now it is November. The Halloween trick this year was continued rain that allowed intermittent field work in some areas, none in others.
I received an e-mail yesterday that had a series of photos of a harvest near-disaster. It showed a tracked grain cart buried in the mud on one side badly enough that the track was out of sight and it was nearly tipped over. Two four-wheel drives and a track hoe were being used to excavate it. Maybe that is “extricate” it, but the first is closer to reality.
Harvest unknowns
The reality of this harvest has yet to be realized. Do we have over 13 billion bushels of corn if three-quarters of it is still in the field the first of November?
What are the harvest losses going to be? What about yields 20 bushels/acre less than last year, with much of the loss being in lower test weight?
What about vomitoxin problems that have corn in some areas being limited in where it can be sold? What about even ethanol plants with vomitoxin problems as they try selling DDGs that has a vomitoxin test of 15 parts per million?
The questions continue. What about soybean harvest losses? The farmers can’t be getting all of them in the mud. The Delta farmers are losing theirs completely with flooding.
Who knows?
So, is this a record bean harvest or not? USDA provided some insight in the harvest progress numbers, but the January Inventory Report may be the real market mover.
The government has the corn crop only 25 percent harvested, up just 5 percent from last week. That is less than half where we were last year, and the normal is nearly three times that, at 71 percent.
By now, it is normally only the northern areas that are not done, like in northeastern Ohio and N.Y. This week, Ohio was spot on the national average, at 24 percent. We gained 7 percent from last week, but lagged last year’s 68 percent and the normal 60.
When you think of corn, you think of Iowa, and they are worse off than us, as is Illinois. Iowa has 18 percent of the corn off, and Illinois is at 19.
Beans in the way
The lack of corn progress can be blamed on the slow bean harvest. The corn is standing. Snow will soon take down the beans.
The U.S. is still only 51 percent harvested on the soybean crop. We cut 7 percent last week, but normal is 87 percent, with only the Delta usually dragging any big acres.
So, the tale of this harvest is not over. We will be talking about it for years, and the markets will be reacting until well into next year.
I continue to think these harvest delay bounces are selling opportunities. Sometime next year we will know if I am right.
