Farm Journal Midwest Crop tour completed last week failed to provide the friendly market input producers were hoping to see. It seems many producers throughout the Midwest have gotten stung by backyard syndrome, confident their crop was no where as good as the USDA was predicting and even more confident the croup tour would verify this opinion. Unfortunately, the Crop Tour seemed to verify the current USDA opinion, pressuring markets to life-of-contract lows. When it was all said and done, the Farm Journal Midwest Crop Tour came out with an estimated national corn yield of 167.1, roughly two bushels per acre better than the USDA, but also roughly two bushels per acre above the implied market consensus. The Tour average bean yield came in at 48.5 bushels per acre, below the USDA. The corn market didn’t take the results well and have traded lower for 8 of the last 10 sessions. As for beans, the market seemed to take the information in stride. In broad terms, the market is not confident in bean yield estimates this time of year, especially in light of the unseasonably cool weather we have seen recently. One of the recurring themes last week throughout the Tour was lower pod counts in many areas. Anecdotal evidence in our neck of the woods seems to verify lower pod counts along with the need for heat to help fill out the beans before harvest.
On the basis front, most markets have softened corn basis. The ethanol plants are able to source ample supplies simply by keeping the doors open. Each day that goes by puts us one day closer to new crop and a potential space crunch. Bean basis has improved in recent days, particularly at the processor level. The steady demand for beans to be crushed for meal and oil is supportive to basis in the short term. The bid structure is very quick-ship oriented with inverted markets to new crop. The new crop basis values for both corn and beans have been mostly steady.
Consider this… Before we get fully engulfed with harvesting this year’s crop, take some time to start thinking about next fall. An easy way to take some of the emotion out of marketing your grain is to commit a portion of your production to CHS ProAdvantage. Sign up for the program is coming up quick. Don’t miss out on the opportunity while you are in the field, give us a call to walk through the ProAdvantage program details and get started.
Aaron D. Ulland
Kasson: 507-634-7545 ext 7
This Material has been prepared by a sales or trading employee or agent of CHS and should be considered a solicitation. The information contained in this presentation is taken from sources which we believe to be reliable, but is not guaranteed by us as to accuracy or completeness and is sent to you for information purposes only. There is a risk of loss when trading commodity futures and options. CHS bases its recommendations solely on the judgment of CHS personnel.