Weekly Crop Commentary - 8/13/2021

Aug 13, 2021

Weekly Crop Commentary - 8/13/2021
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The USDA released their latest crop estimates this week. They made some bold predictions and sent prices higher, post report. These old eyes look at the new set of numbers and wonder if they don’t come up with acceptable ending stock numbers for August and work their way backward on supply and demand. While the soybean table had little change, the corn figures created a lot of fireworks. August carryout projected at 1.242 billion bushels; this is a 200 million reduction from July.  With a five bushel per acre reduction in total yield, (179.5 to 174.6) our corn production is down 415MB and without a significant drop in demand, we would be looking at 1.0 billion bushel of carryover corn! However, it’s only August and we have a long way to go to start adding up bushels. The Ohio corn crop is currently rated at 193 bu. per acre, up 22 bu./acre over last year. Soybeans are rated at 58.0, 4.0 bu./acre increase over last year. Both numbers will produce record crops in Ohio. As we all prepare for harvest it may be a good time to look at your anticipated production, bushels committed, space on hand and catch-up sales if needed. Current fall basis levels are indicating that we will be space defecate in Ohio and very dependent on our transportation network to meet our customer’s fall harvest needs. Please continue to be safe and have a great week!

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Good afternoon.  Happy Friday the 13th to all.  This has been quite an eventful week.  The USDA reported soybean sales of just under 1 MMT this week.  These were split between China and unknown destinations, which most of the time end up being China.  This shows they are still needing to buy coverage and their crush margins turned positive this week.  The opportunity was provided, and they took some risk off the table.  We did have the much-anticipated crop report yesterday, and as advertised it provided some fireworks for us to watch.  The corn yield for the nation is expected to be 174.6, down over 4 bushels from the trendline.  As expected, the Dakotas and Minnesota look to be the hardest hit, but here in Ohio, we are expecting a record-breaker at 193 bushels per acre. It looks to be big in this area and most have gotten some nice August precipitation this week to put the icing on the cake.  On the soybean side, the yield is expected to average 50 bushels per acre, down 0.8 bushels from the trendline.  Ohio is expected to average 58 bushels per acre and if it comes to be that will make the soybean crop record large also.  This spells trouble for the local basis this fall.  If you have bushels on DP, they are under substantial basis risk as we get closer to September.  As always have a great weekend and we look forward to next week.
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Production cuts in yesterday’s USDA report gives the market an upward direction today but corn has backed off the highs of yesterday.  Traders will chew on the numbers over the weekend but there is some skepticism with what the USDA put out.

Next week the Pro Farmer crop tour will gain significant attention more so on the commentaries coming from the field rather than the yield estimates.  This tour will give some proof to USDA’s numbers if it is correct.
Weather is called to shift into a wetter pattern the last half of August this will defiantly help the bean pods fill.   Rain measurements locally have been extremely spotty but at this point, every little bit counts.  

Call your local elevator to put target orders in place we are still in for high volatility with the markets.  
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Happy Friday the 13th! Thanks to a bullish USDA crop report on Thursday, commodities are all in the green for the week. Corn futures have gained 13-16 cents, soybeans are up 28 cents, old wheat up 48, and new wheat up 22 cents. Mechanicsburg corn basis is unchanged, cash beans are a dime weaker, and wheat is also a nickel weaker.

USDA shocked the traders yesterday with a reduced U.S. corn yield of 174.6 bushels per acre, 3 BPA below the average trade estimate, and even 1.1 BPA below the lowest trader’s guess. This is a 415-million-bushel decline in supply from the July report. However, they also reduced demand in the balance sheet, so the new crop carryout does not reflect such a large decrease. The USDA also lowered soybean yield from 50.8 BPA to 50.0 BPA, 0.4 BPA lower than the average trade estimate. This is a 66-million-bushel decline in production from the July report, but as with corn, they reduced demand leaving the carryout unchanged.

Ohio corn yield is pegged at 193 and 58 for soybeans. If these numbers come to fruition, they would be record average yields for Ohio. Make sure your bins are cleaned out and ready to go for this plentiful year! Have a great weekend and we’ll chat next week.
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We know it is almost fall when we start talking and seeing high school football on the agenda.  They are starting a week earlier this year so that makes it seem even earlier.  We are seeing kids and teachers get ready to head back to school.

We saw the latest and greatest from the USDA on Thursday.  I am not going to talk about the numbers because I am sure Wes did. 
What they told us is that we have a very good, possibly record crop coming here in Ohio and the farther you go north and west, the worse it gets.  

Pro Farmer will be doing their tour starting next week so we will see what they have to say. Ohio Country Journal did a tour last week and you can see their findings on their website.  

You now should have a better handle on what crop you are going to have.  We need to have a plan in place on what we are going to do with this crop.  You need to look at what you have sold, what you can hold, and what do you have left to sell. 

Today, harvest corn is over $5, and soybeans are close to $13.00.  If your yields are close to what the USDA says, these numbers look very attractive. 

I discuss with my customers all the time about risk.  How much risk do you need to keep on the table?  We can say, well carryout stocks are tight so we should see numbers like we did last year.  That may be true but in the world today, as we found out in 2020, the world can change in a second.  When you are looking at gross revenue per acre of close to $1000.00 an acre on corn and $700.00 an acre on soybeans it may be prudent to take some risk off the table and lock in the best profits we have seen in years.  You very rarely sell every bushel at the top of the market but if you keep selling as the market moves higher your average at the end of the day will be what you need to continue to do what you do.

Please continue to be careful in working out there as we got a strong reminder here in Ohio this week that bad things can happen and your family and friends have to deal with the results.
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Good Afternoon, well what can we say. USDA did not disappoint with the numbers yesterday. The markets were once again caught off guard when USDA released its numbers. USDA July yield for corn was at 179.5 and they pulled it down to 174.6. USDA is not known for reducing the national avg corn yield by that much in their August report. That in itself caught the market off guard and the corn market was off to the races yesterday. The 21-22 corn carryout stocks then came in below the Average Trade Est as well at 1.242 billion bushels. That will help keep the market supported until we get a better idea of what the crop will be. No big surprises in the bean market other than we still know that the ending stocks for 21-22 are extremely tight and we have no room for error with our crop as well as the South American crop this year. I believe that beans will stay supported as well for now. Wheat got the biggest surprise of all with US-ending stocks coming in well...

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