Markets sluggish

Farm Forum

09/29/15 — Markets are sluggish as harvest is upon us for fall crops, with corn and soybean harvest advancing nicely in the past week. The next few weeks will see the heaviest harvest activity of the year, and that could pressure grains somewhat, especially since yields seem to be at or above expectations. That could lead to a sluggish market for the next few weeks.

Weather has been nearly ideal for harvest the past few weeks, and that has led to corn being 18% harvested as of yesterday vs. 23% normally, and soybean harvest 21% complete vs. 16% normally. The beans are especially coming off fast as they are dry nearly everywhere in spite of no frost yet in the Corn Belt. Corn dented is 97% (equal to average), while corn mature is 71% vs. 72% normally. Soybeans dropping leaves is 74% vs. 70% normally. Crop conditions were unchanged for corn at 68% G/E, but down 1% in soybeans to 62% rated G/E. Pro Ag yield models showed little change in corn (down 0.53 bu/A) at 173.3 bu/acre (vs. USDA at only 167.5 bu/acre), but soybeans declined 0.44 bu/acre to 46.22 bu/acre, a fairly large decline for only a 1% drop in conditions. So far yields have been good (and even record large in some instances), but overall we are certainly not as good as last year nationwide.

Other crops are also developing well, as September got a little drier than the rest of the summer, but crops were able to finish out the year on stored soil moisture. Cotton bolls opening are 69% vs. 70% normally, with cotton 11% harvested vs. 12% normally, and conditions 50% rated G/E, down 2% from last week and vs. 49% last year. Sorghum is 96% coloring vs. 89% normally, with 65% mature vs. 55% normally and 36% harvested vs. 32% normally. Sorghum conditions are 65% rated G/E, down 1% from last week but vs. 57% last year; we may very well have a record large sorghum crop in 2015!

Sugarbeets are 17% harvested vs. 13% normally as harvest is going unhindered except being slowed by warm weather (its supposed to cool off for the next few weeks, though). Winter wheat is 31% planted vs. 35% normally, with 7% emerged vs. 11% normally. Pasture and range conditions have declined some with little rain in September, now at 43% rated G/E (down 3% this week) and vs. 49% last year at this time. Topsoil moisture is 59% rated adequate/surplus (down 3% this week) vs. 66% last year, and subsoil moisture is rated 61% adequate/surplus (down 3% this week) vs. 63% last year. Overall, we have dried out somewhat in September, and crops relied on stored soil moisture somewhat.

With the decline in soybean crop conditions and the yield model, we have become less bearish soybeans (but still bearish as much of the harvest is left). But corn yields are still well above USDA numbers, so corn/wheat may struggle as USDA will probably have to hike yields in the October, November, and January reports. Therefore, we are not expecting any significant move in grains as harvest pressure comes amongst us (unlike last year when prices rallied significantly at harvest during what was finally learned to be a record large crop of both corn and soybeans). We look for grain prices to remain sluggish through most of the fall.