USDA released its weekly Crop Progress Report and its monthly Crop Production Report to mild murmurs in the markets.
Slightly higher soybean yields eased prices, while slightly lower corn yields firmed prices. December corn futures gained nearly two cents Monday, closing at 3.69 1/4.
Corn yields down
USDA’s Crop Production Report put the crop at 14.407 billion bushels. This was a drop of 68 million bushels from the October report, and it came because of a slight adjustment of yield.
USDA now predicts the U.S. yield at 173.4 bpa instead of the 174.2 of last month. Ohio’s yield was cut from 178 bpa to 177. This was no big deal, but it helped prices for one day.
On Tuesday so far, however, we are down two cents. The market giveth (Monday) and it taketh away (Tuesday).
Soybean yields up
The opposite was true in the soybeans. USDA bumped the yield up, and prices came down. Uncle Sugar now reports an estimated increase in yield 0.4 bpa to 47.5. This change led to an 11-cent drop in price on the Chicago Board of Trade. The January futures closed at 10.25 3/4. This Tuesday morning, however, we have got more than that back. We are six and three-quarters higher at 10.32 1/2.
These modest price adjustments come as the harvest as reported by USDA is winding down to a close. The U.S. corn crop was 80 percent done as of Sunday night. This is right on the five-year average of 80. That was a 15 percent gain from the previous week. Last year at this time we were at 82 percent.
Still slow going here
Ohio, Wisconsin, Michigan and Pennsylvania are the laggards. Ohio is at 67 percent harvested, which has caught up to the Ohio average of 67. That is up 15 percent from last week. Last year at this time we were ahead of normal, at 75 percent.
Wisconsin is only half done. Michigan is at 43 percent, 20 percent off the average. Pennsylvania is at 65 percent, but that is only 5 percent behind their average.
Locally, it seems like there is a fair amount of bean acres to harvest. I would also bet there is more standing corn here than in the rest of the state. We had some rain, and farmers have not gotten in a panic to harvest cheap corn in order to use expensive propane for drying. Had a report from a local elevator this morning that corn receipts varied from 16.5 moisture to 26.5 percent.
U.S. bean harvest
The U.S. soybean harvest is at 90 percent. That is only up 7 percent this week, as the emphasis seemed to be on the corn harvest. The average is 91, so we are right on target after playing catch-up for a month. Ohio lags just a little, at 86 percent. We added 14 percent of the crop to bins this week.
The harvest is dragging in Tennessee, North Carolina, and Kentucky, but the market will not move on their slow harvest, as they are minor states.
Corn prices recovered nicely from a low of 3.18 1/4 on the first of October to a high of 3.81 on the 30th.
Since then, we have struggled, and are now 3.67 1/4. The January soybeans put in the low also on the 1st of October, at 9.12 1/4, and the high on the 30th, at 10.59 1/4. This was a gain of nearly a buck and a half, but we have eased off to a current 10.32 1/2.
It is hard to tell what the future may bring for corn and bean prices. I feel that, after this bounce, the soybeans can be sold to make space for the corn, if necessary. If the farmer has enough space, he is likely to hold both.
The mood on the farm is that, after the last few years, money is not critical, and the prices seem cheap. The reality for the corn is that they are likely to stay cheap, but the carry in the futures markets (July futures are 28 cents higher than December futures) makes storage seem safe.
The same is not true in the soybean markets. The carry from January to July is only 21 cents, and the value of beans in the bank account is much greater.
After the bounce in soybeans, it is not so early to bet on higher prices. However, the price still seems cheap after what we saw the last couple of years.
The reality is that, with the big crops prices do not have a good reason to improve. The corn crop is estimated at close to 14.5 billion bushels. The increase in soybean yields get us very close to 4 billion bushels for soybeans.
There are hard decisions ahead.
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