Corn prices have remained relatively steady since mid-December, with daily fluctuations of only a few cents. Corn has seen strong demand both in the export market and domestically that has helped to support prices despite replenished stocks from the record harvest. Some fear remains in the market with China rejecting shipments of U.S. distiller’s grain, claiming the shipment contained an unapproved GMO. Soybean prices have not been as strong as corn prices, losing more than 60 cents in the last two weeks. Reports of another record soybean harvest in Brazil combined with expectations of an increase in planted acres this summer here in the U.S. have many traders feeling bearish. One positive note in the soybean market is that demand remains strong. Wheat markets are seeing a similar drop in prices. Nearby Chicago wheat futures have lost 70 cents since the beginning of December. While lower corn prices have reduced demand for wheat used as livestock feed, much of the decline is linked to an expected increase in supplies. Planted wheat acres are expected to hit a six year high when official USDA estimates are released. Record-shattering cold temperatures initially caused some fears of winter-killed wheat in some parts of the country and temporarily brought up prices earlier this week, but snow cover in the hardest hit areas has insulated the crop and damage is now expected to be minimal.
Crop Market Update, October 28, 2013
Corn and soybean prices have remained steady throughout the week despite continued harvest progress. Strong demand both in the export market and domestically have helped to support soybean prices this week, but expectations of improved yields have kept prices in check. Soybean harvest is currently 77% complete, right at the 5-year average with 14% of the U.S. crop harvested in the last week. Corn has also held steady this week despite good harvest progress and expectations of a bumper crop. Strong demand as well as many producers expected to store their grain seems to have kept corn prices from falling too far in the face of a record crop. About 20% of the U.S. corn crop was harvested in the last week with 59% of the U.S. harvest complete and just 3% behind the 5-year average. While wheat prices have remained strong throughout the fall, excellent crop conditions and near normal planting progress have contributed to the recent bearish trend in wheat markets. The U.S. winter wheat crop is 86% planted, slightly ahead of the 5-year average and the crop is rated 65% good or excellent.
|Futures Quotes (Contract)||This Friday||Last Friday||% Change|
|Corn (Dec 2013)||$4.40||$4.41||-0.23%|
|Soybeans (Nov 2013)||$13.00||$12.91||0.70%|
|Cotton (Dec 2013)||$79.08||$83.11||-4.85%|
|Wheat (Dec 2013)||$6.90||$7.05||-2.13%|
|Rice (Nov 2013)||$15.54||$15.29||1.64%|
|Source: Corn, soybean, wheat, and rice prices are from the CMEGroup; Cotton price is from the Intercontinental Exchange|
|Prices are $/bu for corn, soybeans and wheat, cents/pound for cotton, and $/cwt for rice|
September WASDE Report Revises Corn Yields Higher and Soybean Yields Lower
After all of the news from crop scouts in the corn belt a few weeks ago, the much anticipated September WASDE report has been released. One of the bigger surprises came with the estimated corn yield. Pre-report estimates were expecting a reduction in corn yields from last month on news that the Iowa corn crop was not as good as previously thought. But, the USDA actually revised yields 0.9 bu/acre higher with a great crop in the South and the Eastern Corn Belt more than offsetting lower yields further West. The increase in yields will result in a record 13.843 billion bushels in corn being harvested this fall. Even with an increase of 55 million bushel in demand, ending stocks were revised up 15 million bushels from last month. Mississippi is expected to top last year’s record corn yields with a 170 bu/acre yield.
With reports coming out a few weeks ago of poor pod counts, it is unsurprising that the USDA revised soybean yields down by 1.4 bu/acre to 41.2 bu/acre. This figure is in line with most pre-report estimates. The lower production is partially offset by decreased crush and exports, however ending stocks were still revised down by 70 million bushels from last month to 150 million bushels. This is only 25 million bushels more than last year’s ending stocks.