This is the SFN Market Report with Brooks Schaffer of Palmetto Grain. Reach him at brooks@palmettograin.com or 843-540-4540.
Headlines for corn and wheat continue to lean at least a little bit bullish. Early yield reports for corn started off good but we are starting to hear more reports of disappointing numbers. Still probably going to be a record but continues our narrative of maybe not as big as we had priced in. The very dry finish to the growing season has allowed rapid harvest progress. The dry weather has also resulted in some extremely dry beans with lots of reports of beans coming out of the field at 9% moisture. Monday afternoon, USDA reported corn harvest at 30% complete, advancing from last week’s 21%, and last year’s 31%. Bean harvest was estimated at almost halfway complete at 47%. That is a big jump from last week’s 26% and well ahead of last year’s pace which was at 37%. The drought monitor from last week shows the growing dryness across much of the Midwest.
The corn and soybean markets are holding on very well in the face of harvest pressure. Exports continue to be impressive with the US the cheapest corn in the world right now. We are picking up some large sales on corn and beans. All the more impressive since that is also in spite of the logistic issues created by the low water in the Mississippi and recently ended port strike. The market is shrugging off some of the export sales we are seeing and waiting to see if China is going to show up in a big way.
The soybean market started the rally on dryness delaying planting in Northern Brazil. The weather models are starting to add the moisture in for the next few weeks. Brazilian farmers are arguable a little behind the normal pace right now, but as long as the moisture shows up they will be able to quickly catch up. Not only will they be able to catch up but even if it is delayed further, they still have not lost any yield potential. I say all that to say that i am impressed how well the bean market has held despite the shift in models. There appears to be some kind of support under the market in addition to the Brazilian weather story.
Several wheat producing regions in Russia have declared a state of emergency for drought. There are growing calls by Russian domestic users to limit exports but no movement by the government so far. We have been reporting the weather and NDVI values for months but the market has been slow to price this in.
We get USDA’s latest supply and demand estimates this Friday October 11th at noon. I will report the market expectations for the numbers on Friday morning and then a brief overview of the numbers Tuesday. USDA will incorporate more harvest data to better estimate the US crop sizes. Market will also be watching for any adjustments on the demand side of the balance sheet.