Harvest Progress and Weather Outlooks - Friday, 28 October 2016

Political and logistical uncertainty continue to circulate around the globe which is lending some support to corn prices even during a period of record surplus.  Strength in the Brazilian currency, grain quality issues found in some U.S. bushels, speculation of less corn acres planned for next season in China and soggy conditions in Argentina are all factors currently fueling higher corn prices.  While wet conditions may be interrupting planting progress in Argentina at the current time the Rosario Grains Exchange is predicting they will be the world’s second largest exporter of corn during the 2016-17 season.  This adjustment is a result of the drought in Brazil that caused a drastic reduction in yields as well as a steep +18% increase in corn planted in Argentina.  The BCR predicts U.S. corn exports will reach 48.2 million tons with Argentina coming in second place with 19.5 MT and Brazil coming in 3rd tied with Ukraine with 16.5 MT each.

The latest USDA Crop Progress map is shown below.  Overall the U.S. harvest is 61% completed at this time which is a +15% jump from a week ago but still lagging -1% behind the 5 year average for this time.  Those states with the largest deficit are:

  • North Dakota is -12% behind normal
  • Iowa and South Dakota are -10% behind normal
  • Minnesota is -7% behind

Some of the states running ahead of normal harvest pace are:

  • Kentucky is running +10% ahead of normal
  • Illinois, Indiana and Ohio are all +8% ahead of their normal pace

 

Soybean meal demand that was likely headed towards Argentina is now turning back to the U.S. because crushers in Argentina are unable to keep up.  This news along with the renewed La Niña concerns are helping to advance the soybean market price.  Kevin Van Trump of the Van Trump Report writes, “I’m worried and concerned about longer-term price depreciation, especially if no MAJOR weather headline hits the market during the next six-months.  Not only could U.S. domestic supply projections become a bit more burdensome by early-Spring, but South America could be sitting on increased supplies and U.S. producers looking to plant a fresh new record number of soybean acres, perhaps +5 million more than this year.”

The USDA Crop Progress report for soybean harvest shows that 76% of the U.S. soybean crop has been harvested which is a +14% increase from a week ago.  States that have fallen furthest behind their typical pace are:

  • Michigan which is -12% behind
  • Nebraska -10%
  • Iowa and Kansas are both -9% behind normal

Some of the states running ahead of normal are:

  • Kentucky +27%
  • Arkansas +17%
  • Ohio +15% ahead

 

 

Above normal temperatures are forecasted to continue, the outlook which takes us from October 30th through November 3rd for the majority of the nation.  Precipitation looks to be more varied depending on location.

 

 

NOAA tells us not to expect a noticeable swing in temperatures as we begin the month of November. There will be short cold spells during the early portion of November but that will change as the later part of the month approaches. The jet stream is anticipated to keep storms near the Canadian-U.S. border which will keep areas to the south drier than normal.  This is not good news for those in the far southeastern region of the U.S. where drought conditions are present.

With La Niña looming on the horizon the current drought conditions found across portions of the southern U.S. are becoming more concerning.  Generally the strongest weather impact from La Niña on U.S. weather is found during the winter months so any indications of drought conditions now are expected to persist or worsen as the season progresses.

 

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