For those of you who haven’t seen the numbers, Tuesday’s USDA report was surprisingly bearish, yet again. Yields and production for both corn and soybeans were raised again this month. Just like last month, the market was expecting a friendly report with lower yields based on less than stellar crop conditions. Unfortunately, with the market caught leaning the wrong way, we saw a rather dramatic collapse after the report. At the end of the day, both commodities managed to recover some of the initial loses with corn closing down six and beans down nine. One of the key points from the report yesterday, the USDA numbers may not be right now but the potential for corn yield to drop dramatically, is diminishing. Until a new source or huge increase in demand shows up, corn prices are going to struggle.
Harvest is starting to progress through the corn belt with some local activity reported in isolated areas. In our trade territory it seems beans are anywhere from 10 days to three weeks away from maturity. Corn will need all the time it can have to finish. This week’s heat should help the process immensely. So far the end users have not shown any signs of being concerned over a late harvest start. Bean plants are still showing a mild inverse for quick ship bushels, but nothing as dramatic as seen in years past. The bigger carries are shown from October to November at the river terminals. If you have the ability to hold beans for even a couple of weeks until corn harvest starts, at this point it appears the market will compensate you for the extra handle. The ethanol plants are still showing significant carry from spot delivery to October.
|9/12/17||Pre-report range of estimates||Previous Estimate||Change||Market Impact|
|Corn Production (bil bu.)||14.184||13.878 – 14.249||14.153||+ 31 million||BEARISH|
|Corn Yield (bu/ac)||169.9||166.7 – 170.9||169.5||+ 0.04||BEARISH|
|Bean Production (bil bu.)||4.431||4.179 – 4.417||4.307||+ 124 million||BEARISH|
|Bean Yield (bu/ac)||49.9||47.1 – 49.8||49.4||+ 0.05||BEARISH|
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.