Trade Analyzes New Yield Estimates
Oct 03, 2017
Good Morning! From Allendale, Inc. with the early morning commentary for October 3, 2017.
Grain markets react to the latest in US crop conditions/harvest progress from USDA as new yield and production estimates are analyzed ahead of next week’s Supply and Demand report.
Harvest progress out yesterday afternoon reported corn harvest at 17% (last week was 11%, traders were anticipating 21%). 22% of soybeans were also reported harvested (10% last week, 25% was the estimate). Winter wheat plantings increased to 36% from last week’s 24%. 12% of the crop was reported emerged.
Near Record Highs are being seen in costs for moving grain down the Mississippi due to low river levels. As a result, cash soybean premiums at river terminals have fallen to their lowest price since 2011.
Soybean crush data for the month of August was reported at 151.6 million bushels of soybeans crushed, a bit below estimates of 152.3 mb.
Ideas for next week’s Supply and Demand report are starting to circulate the market. Over the past 20 years, from September to the January report, corn yields were raised 14 times for an average of 2.2% (equivalent of 173.7 bpa). There were 6 years of declines that averaged 2.5% (implying this year at 165.1).
Soybean yields over the past 20 years have been raised 11 times from September to January. The average increase would be 5.1% (implying 51.9 bpa this year). That “average” computation includes three dramatic years of changes (2003 10.4%, 2004 9.3%, 2012 12.2%).
September Farm Service Agency release of crop insurance acreage Allendale expects the October 12 supply/demand report to show the following changes to planted acres…corn -24,000, soybeans 1.123 million, and wheat -333,000.
FC Stone raised their estimate of US corn production to 14.129 billion bushels on a yield of 169.2 bushels per acre. Their last yield estimate was 166.9. Soybean production was estimated at 4.424 billion bushels on a yield of 49.9 bpa, up slightly from their last estimate of 49.8 bpa.
Scarce rains over key Brazilian grain growing regions in September may cause an unexpectedly bigger reduction in the area planted with corn during the summer, according to a weather report on Monday. (Reuters)
Weekly export inspections for the week ending 09/28/2017 showed wheat exports of 691,971 tonnes, corn exports of 782,346, and soybeans of 894,250.
Managed money funds were estimated sellers across the board in yesterday’s action. Traders estimate they sold 7,500 corn, 5,500 soybeans, 3,000 wheat, 500 soymeal, and 3,500 soyoil.
Cattle showlist numbers were up 15,000 nationally. The Texas portion of that list was 6,500 head higher.
Last week’s cash cattle trade averaged 108.01, off the 108.50 the week before. Free market cattle sales last week totaled 92,211 head. That was under the 112,882 from the week prior and just under last year’s 96,054.
Much of the cattle trade believes we have a low in for cash cattle and futures for fall. If that is true, then it will be based on end user interest rather than a supply restriction.
Hog traders are wondering if the last two days of higher futures trade are simply a delayed National Pork Month effect. Normally, futures rally from August 28 to September 15 based on the strong October seasonals.
Dressed beef values were mixed with choice up .60 and select down .22. The CME Feeder Index is 154.30. Pork cutout value is down .55.
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