Market analyst: Higher yields haven't hindered prices yet

By Ray Grabanski
Progressive Ag Marketing

Harvest continues to advance, with a perfect harvest so far for most fall crops.

Almost every crop is ahead of normal harvest progress due to the warm fall (except sugar beets), which usually leads to smaller harvest losses. To make things more bearish, yields have been better than expected for most producers, including the drought-ravaged northwest Corn Belt. So as production estimates continue to improve, it's quite a surprise that prices aren't retreating.

In fact, prices are stagnant or rising, as in the case of new hard red spring wheat highs, as most of the world knows inflation is coming. Even the blind U.S. government is acknowledging as much. The only question is, how bad will inflation get?

 Weather remains warm, with temperatures above normal for the entire two-week period in the U.S. That will help accelerate harvest of crops, although precipitation will increase (its been very dry), with above normal precipitation forecast the coming week in the Pacific Northwest, and then moving into the central Corn Belt in days eight to 14.

Wet weather has improved soil moisture again this week, with topsoil moisture now at 63% rated adequate/surplus (up 5% this week) vs. only 44% last year. Subsoil gained 3% this week to 55% rated adequate/surplus (vs. 47% last year). Soil moisture levels have been replenished nicely this fall, reducing the risk of drought next spring.

Weekly crop progress on Monday showed excellent harvest progress, with corn 52% harvested (11% ahead of normal) and soybeans 60% harvested (5% ahead).

Most other crops are also ahead of normal harvest progress, with sorghum 59% harvested (9% ahead) and sunflowers 29% (8% ahead), while winter wheat is 70% planted, (1% behind).

Sugar beets, however, are behind normal harvest progress due to heat delaying harvest (40% harvested vs. 61% normal).

Corn crop conditions remained 60% rated good or excellent, but the yield model improved a half-bushel in the last week to 177.4 bushels per acre final yield. Its likely that corn yields nationally will also be increased slightly due to the excellent harvest weather and better-than-expected yields.

Soybean crop ratings have ended as well as harvest is over 50% complete.

Ray Grabanski can be reached at raygrabanski@progressiveag.com.