Market Analysis
After above-normal temperatures advanced the maturity of the 2018 corn and soybeans crops this past season, current excessive rains are threatening parts of the western Midwest for the second time this crop year. Early season yields from the ECB have been generally good to excellent for both corn and soybeans, but a more mixed result has occurred in the West. Moisture over past 14 days and the forecast of heavy rains have heightened market concerns and slowed the harvest in the WCB limiting yield reports from this important region.
In corn, last week’s higher final ending stocks of 138 million bu, vs. last month effectively added supplies representing 1.7 bu. of yield to 2018/19 corn output. Food/ ethanol demand may be up while exports down slightly, but the USDA will revise feed/residual usage to near 5.3 billion bu. for 2017/18 crop. next week. Given US livestock numbers, these larger stocks suggest last year’s crop was underestimated. Looking at 2018/19, heavy rains across N. IA and S. MN last spring could reduce harvested area by 270,000 acres when FSA data is available this month. This smaller area and a slightly lower yield of 0.4 bu. from minor western states declines could result in 14.745 billion bu. crop (corn has only minor yield changes.5 of last 7 years) Overall, corn’s 2018/19 stocks may rise by 81 million bu. to 1.855 billion bu. on Oct. 11.
In soybeans, last week’s higher final ending stock level prompted the USDA to up 2017’s crop size by 19 million bu. They will also likely revise bean’s residual usage downward to compensate for 2017/18’s 43 million higher stocks. Similar to corn, last spring’s wet weather into June likely shaved 400,000 harvested soybean acres from 2017/18 crop. Early field yields have been generally strong despite the western Midwest rains suggesting October’s bean yield may rise to 53 bu. like 4 out of last 5 years. US bean stocks likely rise 883 million bu. (+38).
