Corn, bean harvests well off avg.

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Combine harvester

Once again, grain futures markets in Chicago are trading in a narrow range, waiting for new government numbers.

Surprises in the Sept. 30 Grain Stocks Report has traders careful to respect a change in mood in the statistics this time. December corn futures prices bounced 16-1/2 cents higher the last day of September.

The rise was fueled by a revision in the Sept. 1 final grain stocks report from USDA. The government reported a drop of a whopping 335 million in the final ending stocks, which was a surprise to the market and more than the lowest pre-report guess.

The change was rationalized mostly through a revision in the feed and residual usage category, but that is where adjustments are traditionally made when the government makes a final count and admits they are wrong.

It is common for more grain to be used when it is cheap, so it actually makes sense that more was fed. We expect more exports from cheap grain, but the exports are closely monitored, so that limits surprises.

Waiting game

Now we wait for the Oct. 10 Supply and Demand Report, which will also include production estimates. Some analysts expect several factors to affect the supply and demand, and to reduce the new crop ending stocks figure. These factors would include a reduction in exports and slightly lower yields.

It is widely believed the USDA will estimate the corn yield to drop a bushel, to 167-2 bpa. There are published private estimates significantly lower, with one recently published at 162 bpa.

One early model of the corn crop emphasized the late planting and put the crop in the 140s, but great weather is finishing this crop, so this may not happen.

Amidst the enthusiasm of good early yields reported for the April-planted corn is the fear of some frosts still around. We expect snow and frost in the northern states the end of the week, and it remains to be seen how significant this weather event is.

Harvest numbers down

Remember, all the production numbers reported assume the crop gets ripe. The Oct. 7 Crop Progress report showed the corn harvest at 11% in Ohio, versus just 5% last week, but 20 last year and a five-year average of 17%.

At the same time, the U.S. was at 15% harvested, up from 11, but way below the 33 of last year and the 27% average. At the same time, the corn condition was reported to drop 1% total in the good and excellent ratings, to 56. The Ohio crop is only 29% good and 3%  excellent.

A look at the December corn chart shows a high of 4.24-1/4 on Aug. 9, then a low of 352-1/4 on Sept. 9, a 72-cent loss. We gapped lower on Aug. 13, and filled that gap, just, the first of October.

We have traded sideways since the Grain Stocks Report. On the morning of Oct. 8, we are trading the December futures at 3.86-1/4, 34 cents off the low. The recent high of 3.92-3/4 on Oct. 1 was a 56% retracement of the low.

Soybean status

November soybean futures have recovered nicely from the bottom. We had a low of 8.54-1/2 on Aug. 5, and a low of 8.52-1/2 on Aug. 28. However, on Oct. 4 we touched 9.21-1/4, a 69-cent gain.

Currently, we are trading 6.16-3/4, up one and a half cents. The U.S. soybean harvest is at 14%, up from 7% last week, but well off the 31 of last week and the 34% average.

Ohio’s harvest is similar. We have 18% off, up from 6% last week, but well off the 28 of last year and the 33% average.

These numbers are as of the night of Oct. 6, and I expect a large percent of the early beans will be off by the time this is read.

The U.S. soybean condition rating come in at 53% good and excellent, down 2% from last week. Ohio condition is rated 31% plus three, for just a 34% combined rating.

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