Turbulent market continues to confound farmers

0
128
Ag trade photo

In my last column, I complained — maybe even whined — that corn prices were lower than the May 13 December futures low of $3.633⁄4. 

How could we have prices lower than in May? We had big prospects then, and, now, we despair of unplanted acres and lowered yields.

Hitting bottom? 

Then, we had another week of lower prices — with seven lower days on the corn futures, making a new low Sept. 9 on the December of $3.521⁄4. That was corrected a little the morning of Sept. 10, with a bounce of about a nickel in corn and soybeans. 

We are now trading December corn at $3.583⁄4, 4.5 cents above yesterday’s close, and November soybeans at $8.623⁄4, up 5 cents from the last close. 

Turnaround Tuesday could be exciting. If this is finally the bottom, maybe we only lose a dollar a bushel on corn and beans for the privilege of farming. 

The bump seemed to come as the Sept. 9 regular release of the U.S. Department of Agriculture Crop Condition Report suggests that crops have declined in the last week. I say “suggests” because, as far as I am concerned, any numbers out of USDA these days are suspect. 

The market has collapsed on the idea of a yield of 179.5 bushels per acre and huge plantings. The plantings may or may not still be counting acres that are actually prevented planting in the case of corn. 

Historic lows

USDA’s National Agricultural Statistics Service now says the country has a corn crop that is a total of 55% good and excellent. Only 10% of that is in the excellent category. 

This is a decline of 3% in a week. Blame it on cool weather. Blame it on NASS finally catching up to reality, a little. 

This crop is now rated at the lowest since 2013. Remember, however, that prices still hold lower than last year at this time, when the USDA was expecting a larger carry-in and a production of 900 million bushels more than they expect this year. 

USDA has another chance to get this right Sept. 12, the date many of you will read this. New production numbers will come out, and, this time, they will reflect some real field observations. 

Private groups such as Pro Farmer have been out and about, and they claim lower yields, but not by much. They may be observing good fields and not bad. They may be correct. 

Harvest questions

The biggest unknown is actually in the category of harvested acres. It does not matter what the yield is if it is multiplied by too many acres. 

Still to be remembered — if I may be forgiven for repeating myself — is that all numbers published so far assume all the acres grow to maturity. In my view, that is absurd. 

Some observers say our increased-temperature days in most areas have been average at best. The last two weeks, they have lagged. That would suggest we are not catching up a late crop. 

The eastern Corn Belt, which has been cool, will get one last blast of warm weather, which should help get us back to normal. 

Farmers across the country are praying for a late frost. So, the market is primed for a rally, if farmers are correct about the crop size, instead of USDA. 

They continue to hope that what they see in the back yard is better than it looks when it is in the bin. That remains to be seen. 

Yields suspect

I heard one optimistic estimate of yield Sept. 9 that was based on number of rows and length of an ear that was picked. I did not hear any adjustment for test weight. 

The yield reduction simply from having 54-pound corn, instead of 60, is huge. Do the math. How much corn have you grown that made even 54-pound test weight, when it was planted in June? 

STAY INFORMED. SIGN UP!

Up-to-date agriculture news in your inbox!

NO COMMENTS

LEAVE A REPLY

Receive emails as this discussion progresses.