Harvest Underway - Monday, 14 October 2013

The government shut down is affecting American’s in many different ways all around the globe.  Last week I watched a news report discussing the unnecessary closing of National Monuments and National Parks here in the United States and around the world.  During this report they interviewed several American’s that were standing in front of the gates to the site of the WWII cemetery and battle ground in Normandy, France.  These individuals had planned and saved for this trip for several years only to find that this important destination was inaccessible due to our government shut down here in the U.S. Regardless of which side of the political isle you may stand we all have to deal with this unfortunate circumstance.

 

As everyone involved with Agriculture noticed, there was no USDA reports again last week.  No Crop Progress, no yield data, no Supply and Demand report and no FSA Farm Program payments. The USDA offers producers and traders alike a “benchmark” to go by even if you may not agree with the numbers they give us. This highly anticipated Supply and Demand report was finally going to give us some answers after a very uncertain crop growing season, so the loss of this report was a significant misfortune for grains.  Now we wait and wonder will the information, once it is released, be given in the format from which we would have received it had it arrived on time or will things be handled differently do to the delay? 

Along with a few private analysts putting out yield and production estimates Informa Economics released their estimates last week and those numbers were watched carefully and the market did respond slightly bullishly.  This is somewhat of a surprise if some of numbers out there are even close to reality:  Illinois – last year this particular farm went 25-30 bushels per acre, average for this farm is 150-170 bushels per acre and this year it is yielding over 200 bushels per acre; Kentucky – a producer said they checked their yield monitor 3 times because they could not believe what they were seeing – soybeans yielding just over 100 bushels per acre! 

Most producers have built storage over the last several years and are putting it to good use this fall.  It’s impossible to guess where the grain prices will head over the upcoming months but here are some facts that may influence the direction:

  •  Lack of reports brings uncertainty and bearishness
  • EPA mandates may be adjusted-there has been some discussion about this subject lately, this would be negative to corn prices.
  • Funds are long 150,000 contracts of soybeans but technical indications are hinting that soybeans may be topping out and could go lower.
  • The fight for acres is likely to be a positive force for corn and may keep it from falling off completely.
  • Prevent Planting acres and abandoned and silage acres may (but not likely) offset the record corn crop that is expected to hit near 14 billion bushels this year.
  • Feed demand is slowly increasing as harvest makes corn more readily available and the switch can be made back to corn from wheat again.

 

  • The unrest in several areas of the Middle East weighs on the market.

Syria imported nearly 60 million bushels of U.S. corn annually prior to the escalation of their civil war.

U.S. involvement in this situation likely would lead to tensions with other importers of U.S. grain, somehow Ag commodities often get brought in to events such as this.

Hopefully by next week I will be able to present you with some government numbers and reports to help you plan your marketing strategy for 2013 and your approach to your acres for 2014. 

HAVE A SAFE HARVEST!!

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