Aug 21 – 2018 US Crop Progress vs. ProFarmer Crop Tour

Good Morning!

Grain prices are all in the red this morning as the complex gives up recent gains despite some slight crop progress report data improvements.

“Science literacy is the artery through which the solutions of tomorrow’s problems flow.” – Neil deGrasse Tyson (US Astrophysicist)

2018 US Crop Progress vs. ProFarmer Crop Tour

Grain prices are all in the red this morning as the complex gives up recent gains despite some slight crop progress report data improvements.

As Garrett mentioned in yesterday’s Grain Markets Todaywheat prices saw double-digit losses as the market tuned in whether Russian wheat export issues were true or not. Also, some rains in European and eastern Australia were considered bearish. This morning, wheat prices continue to their pullback on a healthy-looking US spring wheat crop, as indicated in yesterday afternoon’s crop progress report out from the USDA.

On the geopolitical front, US and Mexico are continuing their bilateral NAFTA conversations, with some expectation that an agreement could be announced this week. Helping move things along was the US dropping their effort to put seasonal measures on some Mexican ag exports to gain wins in the broader automotive and manufacturing sectors. [1]

While we talked a little bit in yesterday’s Breakfast Brief about canola prices, some of those gains are being taken off the table this morning.

Crop Progress Shows Slight Decline

Yesterday afternoon we got the USDA’s weekly Crop Progress report, which showed some slightly weakening quality in American corn and soybean fields.

The average good-to-excellent (G/E) rating for US corn fields dropped by 2 points to 68%, now matching the 5-year average. Looking more regionally, we saw significant weekly declines in the north, with Minnesota’s corn crop, rated G/E down 3 points to 74%, South Dakota’s falling 4 points to 65%, and North Dakota dropping 9 points to 70%.

Also, worth noting is Missouri’s corn crop rated G/E climbing 2 points up to 28%, but that’s still a far cry from the five-year average of 63%.

2018-08-19-us-corn-condition-crop-progress

44% of the US corn crop is also dented, well ahead of the 5-year average of 26%. This continues to indicate that US corn crops are developing faster than usual.

On the soybeans side of the USDA’s crop progress report, the percentage of fields rated fell by 1-point week-over-week to 65%. While this is still better than last year’s rating of 60%, it is now below the 5-year average of 66%.

What was more interesting though was some of the state-by-state declines, notably in the north. Both Minnesota and South Dakota saw the portion of their state’s corn crops rated G/E fall by 6 points while North Dakota’s corn fields marked G/E fell another 8 points. This means that in the last two weeks, the North Dakota corn crop rated G/E has fallen 19 points!

Will the fringe acres in the north be able to add a significant boost to US corn and soybean production as they have in years past?

Rounding things out, the US spring wheat crop rated G/E is sitting at 74%, unchanged on the week and a good stretch from the 5-year average of 60% and last year’s dismal rating of 34%. The American spring wheat harvest is also cruising along, with 60% of the crop now in the bin, ahead of the five-year average of 43% by a good margin.

ProFarmer Crop Tour Begins

Fighting the crop progress for attention, the first legs of the 2018 ProFarmer Crop Tour are in the books. As usual, variability seems to be the name of the game, especially for corn, with the range from biggest to smallest yields more than 100 bushels per acre. [2]

Scouts rolled west-central Ohio yesterday, finding some very promising soybean fields. Scouts found an average yield of 179.6 bushels per acre (BPA), up 9% from the 164.6 BPA seen last year and more than 16.5% better than the three-year average.

For soybeans, average 3-feet-by-3-feet pod counts came in at 1,248, up 13% year-over-year and 14% from the three-year average.

To sum up, one scout said that it’s “a pretty outstanding Ohio crop.” [3]

On the other side of the tour, in SE South Dakota, crop development has been pretty quick and may have an impact on yields. While the drier areas in the western parts of the state weren’t toured, average corn yields were calculated at 178 bushels per acre. [4] This is up 20% over last year’s 145 BPA on this part of the tour, and 12% better than the three-year average of 154.6 BPA. Currently, the USDA is forecasting average corn yields in South Dakota to come in at 170 bushels per acre.

From a soybean pod count perspective, average numbers in this part of South Dakota came in at 1,024 pods. This is a 14% improvement over last year’s 900 pods and 5% better than the three-year average of 975.

Worth mentioning are also some areas in Nebraska that got toured yesterday with some significant hail damage. [5] Today’s part of the ProFarmer Crop Tour will finish off Nebraska in the west, while in the east, the western half of Indiana will compliment the eastern leg done yesterday.

To growth,

Brennan Turner

President | CEO
FarmLead
TF: 1-855-332-7653
contact@FarmLead.com
@FarmLead or @GrainCents on Twitter

 

At 7:20 AM CST in the North American futures markets (*not cash prices*):
(all prices in dollars per bushel unless otherwise indicated)
$1 USD = $1.3024 
CAD, $1 CAD = $0.7678 USD)

Dec Corn: -1.8¢ (-0.48%) to $3.748 USD or $4.881 CAD
Nov Soybeans: -5.0¢ (-0.56%) to $8.928 USD or $11.628 CAD
Oct Soybean Meal (per short ton): -$0.10 (-0.03%) to $328.90 USD or $438.36 CAD

Oct Soybean Oil (cents per lbs): 0.04¢ (0.14%) at 28.71¢ USD or 37.39¢ CAD  
Dec Oats: -1.5¢ (-0.56%) to $2.670 USD or $3.477 CAD
Dec Wheat (Chicago): -7.8¢ (-1.39%) to $5.548 USD or $7.226 CAD
Dec Wheat (Kansas City): -8.0¢ (-1.38%) to $5.668 USD or $7.382 CAD

Dec Wheat (Minneapolis): -3.3¢ (-0.54%) to $6.088 USD or $7.929 CAD
Nov Canola: -$1.50 (-0.29%) to $11.748/bu / $518.00/MT CAD or $8.896/bu / $396.23/MT USD

COMMODITY TRADING INVOLVES RISK AND MAY NOT BE SUITABLE FOR ALL RECIPIENTS OF THIS POST. Neither the information presented, nor any opinions expressed, constitutes a solicitation for the purchase or sale of any commodities. The thoughts expressed in this email and basic data from which they are derived are believed to be reliable, but cannot be guaranteed due to uncertainty about future events and complexities surrounding commodity markets. Those acting on the information are responsible for their own actions.

About the Author
Brennan Turner

Brennan Turner is the CEO of FarmLead.com, North America’s Grain Marketplace. He holds a degree in economics from Yale University and spent time on Wall Street in commodity trade and analysis before starting FarmLead. In 2017, Brennan was named to Fast Company’s List of Most Creative People in Business and, in 2018, a Henry Crown Fellow. He is originally from Foam Lake, Saskatchewan where his family started farming the land nearly 100 years ago (and still do to this day!). Brennan's unique grain markets analysis can be found in everything from small-town print newspapers to large media outlets such as Bloomberg and Reuters.

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