Last week I confessed that I was wrong when I predicted that the lows were in for corn and soybeans. This week the bad news just kept coming.
We made a new low for December corn on Aug. 31 at 3.14 3/4. The new bean low was 9.37 on Sept. 1, and even the December wheat hit the bottom at 3.91 1/2 on Aug. 30. In the wake of the last week, we now have the experts saying that December corn futures could get to $2.80. Yuck.
A look at this morning’s CHS Hedging Morning Highlights report just gives us more of the same.
It keeps coming
Start with the corn yields. Last week I said the one bright spot was that the Pro Farmer report came in five bushels below the USDA estimate. Not so. A prominent brokerage firm that Friday predicted 175.6 bpa for corn, actually above the USDA’s 175.1 slightly. The same firm has put its soybean yields estimate at 50.1 bpa, well above the USDA’s 48.9.
Then, look at the CFTC (Futures Trading Commission) report that said that the funds, the “managed money” portion of the traders, were a net seller of 8,561 contracts of corn last week. Add to that the fact that they sold 27,665 contracts of soybeans, and 4,444 contracts of bean meal. These sales, and these statistics, weigh heavily on the markets.
We have said that all the major wheat-producing nations except France have had big crops. A Russian consulting company has raised its forecast of Russia’s wheat crop 2 MMT to 72 MMT. This is now equal to the USDA forecast, so it basically confirms what we already suspected.
Oh, yeah, I forgot. The weather news this morning is for a large area of rain across the north. Along with this is a precipitation map for Wisconsin, Iowa, Kansas, and Missouri that says the area will get over 3 inches of rain in the next week. That is enough to finish the crop, if needed.
If we focus on crop progress instead of price-reducing news, it is interesting that fall has started in northeast Ohio. The first leaves are off the trees. The slight (am I imagining it) tint of yellow in the soybeans has given way to waves of yellow and fields that are predominantly yellow. Drive up state Route 11 and you notice that the green boundaries of the right-of-way are going off to yellow-green. The air conditioner is staying off at night, with temperatures in the low 50s.
Especially for those in the wetlands of the north, it is encouraging to see harvest approaching. The thought of parking semis in the fields and running fast on the hard ground is wonderful to those of us who have ground out the crops in the mud. The first corn is being chopped by the dairymen, although it is mostly a matter of opening up fields so far.
So, it is the time for anticipating the exciting harvest, which for most of us will be better than we expected in the dry spell of late June and early August.
It is the time for hoping that there will be a time ahead when prices recover. It is the time to be glad that we are not farming farther west this year. Northcentral Ohio got nice rains in August, but the crop was hurt badly before that.
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