By Ray Grabanski
Special to the Farm Forum
09/12/17 — We’ve recently had a dramatic change in the weather forecast for much of the Corn Belt, as we started September with much below normal temperatures for much of the Corn Belt, especially the northeast Corn Belt. But in the past 2 weeks that forecast has changed from one of below normal temps to above normal temps, a warming that is extremely important to helping to get this 2017 crop to maturity in many northern areas. Without it, it’s likely that if early September weather were to continue into mid-fall, that frost would damage many crops and reduce the crop size of the 2017 corn and soybean crop. Instead, it appears that the warming trend will help the crop maintain its current yield potential – which is basically about an average crop (trend).
Today is the Sept. USDA report which was released at 11 am, with the average trade guess expecting a drop in corn yields of from 1.3 to 1.7 bu/acre (depending on who you listen to). They also expect a drop of soybean yields from 0.7 bu/acre to 0.6 bu). Pro Ag yield models have risen since the August report by 3.28 bu/acre in corn and 0.6 bu/acre in soybeans. Instead, we expected an increase in yields, say 1 bu/acre in corn (to 170.5 bu) and 0.1 bu/acre in soybeans (to 49.5 bu/acre). So we are not expecting the same bullish report that the trade seems to anticipate (they anticipated a bullish report in August, too, and instead it was bearish).
The numbers USDA reported were higher as we expected, with corn yields up 0.4 bu/acre to 169.9 (2.1 bu higher than expected). Soybeans were raised 0.5 bu/acre to 49.9 bu/acre (1.2 bu/acre higher than expected). Ending stocks of corn and soybeans were higher than expected as well (202 mb in corn, 38 mb in soybeans) so prices dropped on the report.
Working against the bulls is the forecast we talked about above that now calls for above normal temps for the next 2 weeks – the critical time to avoid a frost for this somewhat late developing crop. The switch from below normal temps to above normal has taken place over the past week or two, and is a fairly bearish development as it appears any damage from a frost threat is becoming more and more limited. Now both the next 7 days and the 8-14 day forecast are for above normal temps in all the Corn Belt. Precip the next 7 days is below normal for the central and eastern Corn Belt, and normal to above normal for much of the western Corn Belt and the western U.S. Precip in the 8-14 day period is for above normal in the northern Corn Belt, and normal to below normal elsewhere. Overall, this is a favorable forecast.
Crop conditions out yesterday afternoon 9/11 were steady corn at 61% rated G/E, with the Pro Ag yield model up slightly (0.06 bu) to 171.23 bu/acre, up from USDA’s August report of 169.5 bu/acre. Soybean ratings declined 1% to 60% G/E, with the Pro Ag yield model down 0.16 bu/acre to 47.33 bu/acre. Apparently, it is a bit dry in some soybean areas and that is causing some stress late in the filling process.
Crop development is moving along, with corn 96% dough stage (1% behind normal), and 75% dented (6% behind normal), and 21% mature (10% behind normal). Corn is 5% harvested (1% behind normal). Soybeans are 22% dropping leaves (3% behind normal).
Cotton bolls are 34% opening (6% behind normal), with 9% harvested (5% ahead of normal). Cotton is rated 63% G/E, down 2% but still well above last year’s 47% rating. Sorghum is 74% coloring (on schedule), and 35% mature (4% behind normal), with 24% harvested (3% behind normal). Sorghum condition improved 3% to 66% rated G/E, which is actually 1% better than last year’s record large yielding crop.
HRS wheat is 95% harvested, 8% ahead of normal, with barley 96% harvested (3% ahead of normal). Oats is 96% harvested, 1% behind normal. Winter wheat is just getting started with planting, with 5% planted (1% behind normal).
Soil moisture declined significantly last week, with subsoil down 5% to 57% rated adequate/surplus while topsoil declined 7% to 55% adequate/surplus. These are both well below last year’s ratings for this time (76% topsoil and 74% subsoil).
With the crop coming through with basically a near average 2017 crop in wheat, corn, and soybeans (it appears), it makes us at Progressive Ag feel a lot better having marketing 130% of a normal HRS wheat crop in early July at an average of $7.97 Sept. for 2016 and 2017 crops, and $6.83 Sept18 for 2018 HRS wheat. We also sold 70% of a corn crop for an average of $4.09 Dec, and 40% of a soybean crop at $10.23 Nov17. Since most of these sales were done within 8-15 days in July, it was a lot to sell at once. But then again, that is when the market topped for 2017, so therefore that was when the opportunity presented itself.
Ray Grabanski can be reached at [email protected]