The Pro Farmer Crop Tour is dominating market thinking this week. Actual analysts are traveling in groups to predetermined sites to create real-life estimates of the corn and soybean crop sizes. Some years, this tour results in surprises that affect prices. This year, we are probably looking at a ho-hummer. Expect the tour to confirm what the trade has factored into prices — huge crops once you get out of Ohio and head west.
Corn is strong
Last week, USDA whacked a couple of percentage points off the corn ratings, but the market shrugged it off with the idea that this always happens in August. This week USDA put 1 percent back on, so we now officially have 75 percent of the crop rated “good” or “excellent”. Last year at this time we had 69 percent rated good or excellent.
Ohio’s corn continues to be rated at 46 percent good and excellent. This is consistent with the current estimate of the Ohio yield at less than 150 bpa. The U.S. is expected to go close to 200 bpa.
Soybeans are in a similar situation, although the ratings have been lower. USDA left the rating this week at 72 percent good and excellent. Last year, we were only at 63 percent. Ohio beans are 56 percent good and excellent.
Locally, we have seen fairly good coverage from spotty thunderstorms. The feeling is that we have hurt the corn yields some, but the beans are filling well now. A Trumbull County farmer commented to me last night that this August was soooo much better than last August, when the beans started dropping leaves.
Beans made price gains Monday on good export news. November futures were up over 11 cents, and some farmers were back thinking about new crop sales again. We are trading this Tuesday morning, Aug. 23, at 10.14 November futures, down nearly 2 cents on the day so far. That is 71 cents above the recent Aug. 2 low, so it is a place to reward the market with sales if you did not sell a lot a few weeks ago.
It is hard to accept that we dropped almost $2.50 from the high, but reality is that it is August and we have had a nice bounce in a mostly negative market.
Looking at those exports, the news yesterday was that 120,000 tons of soybeans were sold to what is currently an unknown (to the general market) destination. This is a large sale at a good time.
With it, the export inspections for the last five weeks are now averaging 835,000 tons a week. Last year in the same period we were only at 230,000 tons.
With these exports, we are hitting the USDA estimates. I am reminded that one good thing about cheap prices is that we are able to sell more easily. This is one reason why the market says that the cure for cheap prices is cheap prices.
Our soft red winter wheat market has recovered a little after a decline of nearly $1.35 in two months. The low was put in the September contract at a few ticks under 4.00 on the 2nd. This morning we were trading 4.10, but that was down five and a quarter cents.
The world wheat market is awash in wheat, so we have low prices. Our best hope currently for recovery is that fact that France, normally a big exporter, is the one country that had a poor yield because of excessive rains. This week the news was that they would export less than 5 million tons outside the EU. Last year they did 12.5 million tons.
So, this is shaping up to be a count-your-blessings year. Be glad rains returned so that northeast Ohio has better crops than north central. Be glad the crops look so good, even if for most they are not as good as the crops in Iowa. They usually aren’t. Be glad that the corn crop may be reduced a bit and one end of the field is better than the other, but the crop is close to being “made.”
The disaster this year will be for those in the driest areas who have poor crops in a cheap year.
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