Harvest yields impressive
09/30/14 — Harvest Yields have been impressive thus far, with corn at 12% harvested and soybeans 10% harvested as of 9/29, with yields so far exceeding expectations of even a record-shattering crop. It’s hard to find corn yielding less than 200 bushels/acre, and also hard to find soybeans yielding less than 50 bu/acre. That means that current Pro Ag yield models which are already suggesting record shattering yields at 177.5 bu/acre corn and 47.5 bu/acre soybeans might be too low!
Weather will turn cooler and more October-like over the next few weeks, with the next 5 days now average or slightly below average for temps, with some possible freezing temps in the far northwest in this time frame. However, the Corn Belt proper will continue to enjoy temps above freezing at least into mid-October – and allow crops to reach even closer to maturity. In yesterday 9/29’s weekly crop progress update corn was 96% dented vs. 97% normally, with 60% mature vs. 70% normally and 12% harvested vs. 23% normally. Yields thus far are exceptional, with many 200+ yields reported thus far (and few below our yield model updated yield of 177.5 bu/acre, down 0.5 bu/acre from last week). Corn conditions were unchanged at 74% rated G/E, up significantly from last year’s 55% and the highest rated since 1994!
Soybeans are 69% dropping leaves vs. 71% normally and 64% last year, with 10% harvested vs. 17% normally at this time. Crop conditions rose to 72% G/E, with 1% moving from very poor all the way to excellent. But the yield model was nearly unchanged at 47.56 bu/acre, up a mere 0.02 bu/acre from last week. Actual harvest yields thus far are exceptional, with few yields below the 50 bu/acre mark except for far northern regions. Overall, Pro Ag believes the yield models might be low in their estimated yields so far based on actual harvest yields. It is becoming quite clear that record shattering yields are going to occur in 2014, it’s just a matter of how much we shatter the previous yield records by. Soybeans are the highest rated crop since 1994 as well, another record shattering yield year.
Other crops continue to develop nicely as well, with cotton now 64% bolls opening vs. 70% normally, with 10% harvested vs. 13% normally and with conditions at 49% G/E, up 1% from last week and vs. 42% last year. Sorghum is 93% coloring vs. 89% normally, with 59% mature vs. 54% normally and 32% harvested vs. 33% normally. Sorghum conditions were unchanged at 57% G/E vs. 54% last year. Sugarbeets are 13% harvested, equal to normal while riace is 59% harvested vs. 62% normally. HRS wheat is 94% harvested vs. 96% normally, so last week with good harvested weather we finally neared completion of the HRS wheat harvest. Winter wheat is 43% planted vs. 36% normally, with 14% emerged vs. 12% normally so we are slightly ahead of normal pace here. Today we get updated small grain yearly summaries, so it will be interesting with the harvest delays if they reduce yields somewhat to reflect lost test weight and quality.
As we’ve said before, we expect the Oct., Nov., and final Jan. report to also show hikes in corn and soybean yields as “large crops get bigger” as our Pro Ag yield models suggest they will. As long as crop sizes continue to go higher, prices will need to go lower to stimulate demand. We remain 100% hedged for multiple years as the trend is down and we are going to have record shattering, mammoth large yields of grains in 2014. Our targets for removing hedges remains $8.40 soybeans and $3.05 corn. Wheat will likely not bottom until the corn finally gets to its eventual low as well, at which time the wheat market might finally hit a bottom as well.