A drive in the country this time of year can be surprising. Here and there are more fields of soybeans and corn than I realized. I have been saying that we had 5 or 10 percent of the beans left and maybe 15 percent of the corn, but there are pockets where it is a lot more.
The weather this week is expected to go back to rain, then snow. If that happens, the beans that are left, that are on the ground that was not dry enough when we had the last dry spell, will be combined on a cold, clear, snow-less day in February. The corn will be mudded off with track combines sometime before Thanksgiving.
After the best, earliest harvest I have ever seen, we still will have some crops drag into the end of the month.
Traditionally, we had Thanksgiving lunch, then we put on the Carhartts and took the corn picker to that last field we just had not finished. Those days are gone, the corn picker is gone, but that last field is still out there this year for some of today’s farmers.
This Tuesday morning I operate without the usual USDA Crop Progress Report because of the Veterans Day holiday. The U.S. corn harvest was 76 percent done last week as of Sunday night, and the trade expects we are now at 87 percent. This is pretty much normal.
The soybeans for the nation are at something in the 90s now. Last week we were at 83 percent, which was behind the normal 89. I am assuming we caught up a few percent, although most farmers were trying to get the corn, and scattered showers were keeping beans damp.
Crop production numbers
While harvest was struggling to get finished, USDA came out Thursday with new Crop Production numbers. The surprise was a 1.8 bpa cut in corn yields. This contributed to a bounce Friday to a new recent high of 3.79 December futures. The bounce was short-lived, as we ended the day only up one and a quarter cents after a 13-cent range.
The drop after the bounce may have been a reflection that USDA then reduced its estimate of exports and feed usage so that the carryout did not change much. They pretty much gave with one hand and took back with the other.
Our recent low was at 3.60 1/2 on Oct. 15, and, compared to that, a price near 3.80 looks good, even if historically it is disappointing.
The big news in corn, however, was the census report from China that revised the last 10 years of production numbers for them by a whopping total of 256 million metric tons! The amazing result of the Chinese revelation that our assumptions about their markets have been so badly off was… wait for this… nothing!
The market seems to be taking the position that, whatever they have on hand, we have been trading what we have been trading, much of that production might be gone with quality problems, and they will not export anything regardless of supply. In other words, there is supposedly nothing to see here!
This Tuesday morning the November soybean futures are trading just under 8.70. We were basically unchanged for the week, even with some shocks in the USDA report. USDA did drop the soybean yield by one bushel, to 52.1 bpa.
Our recent high was at 8.92 November futures on Oct. 15. We got close to that on Nov. 2nd, at 8.88 1/2. Nine dollar futures seem to be a dream just now.
We remarked last week that the wheat market had support at $5, but we actually closed one day below that. On the 25th, the Chicago market closed at 3.87 1/4 after a low of 3.85 1/2. We were down over 12 cents on the day. We quickly recovered, however, so that we saw a recent high of 5.20 3/4 Monday the 12th. Currently the trade is at 5.10 1/4.
This market is being moved around by every bit of foreign news, with production issues here and exports there, but remains cheap. That is likely reflected in the fact that wheat planting in my part of the world is almost nonexistent, even though we have had good weather for the most part.
Overall, our bias is still that it is hard to be bullish with five crops in a row that are better than the trendline yield. Oppressive carryout bushels need to go away to give us better prices. Only the strong seasonal trend of corn especially to rally after harvest gives us hope for better prices.
