August 22 – Less is More for Crop Ratings & Yields


FarmLead Breakfast Brief
Tuesday, August 22nd, 2017

“Sometimes it’s about less is more. It’s about the seed. Thinking about this gigantic tree that you think is so beautiful but it started with this just seed.”
– Fred Durst (American musician)

Good Morning !

At 7:30 AM CDT in the North American futures markets (*not cash prices*):
(all prices in dollars per bushel unless otherwise indicated)
$1 USD = $1.2569 CAD, $1 CAD = $0.7956 USD)

Dec Corn: +0.3¢ (+0.05%) to $3.633 USD or $4.566 CAD
Nov Soybeans: +1.5¢ (+0.1%) to $9.378 USD or $11.787 CAD
Oct Soybean Meal (per short ton): +$0.50 (+0.15%) to $297.80 USD or $374.31 CAD
Oct Soybean Oil (cents per lbs): +0.15¢ (+0.45%) to 34.09¢ USD or 42.85¢ CAD  
Dec Oats: -2.5¢ (-1%) to $2.478 USD or $3.114 CAD
Dec Wheat (Chicago): -0.3¢ (-0.05%) to $4.368 USD or $5.49 CAD
Dec Wheat (Kansas City): +0.5¢ (+0.1%) to $4.363 USD or $5.483 CAD
Dec Wheat (Minneapolis):+2.3¢ (+0.35%) to $6.713 USD or $8.437 CAD
Nov Canola: +4.5¢/bu / +$2/MT (+0.4%) to $9.148/bu / $403.37/MT USD or $11.499/bu / $507/MT CAD

Yesterday’s Winnipeg ICE Close

Dec Barley: unchanged at $2.512 USD or $3.157 CAD
Oct Durum Wheat: unchanged at $7.015 USD or $8.818 CAD
Oct Milling Wheat: -16.3¢ (-2.35%) at $5.456 USD or $6.858 CAD

How much of a rally is enough for the next sale?
How many buyers do you call to stay on top of prices?
Let buyers come to you. Post your grain on FarmLead!

Less is More for Crop Ratings & Yields?

Grain markets are all in the green this morning as the buyers take advantage of some bargain buying following yesterday’s losses.

As Garrett pointed out in Grain Markets Today, weak US export numbers pushed grain prices lower. Compared to last year’s exports at this time, US corn shipments are down 46% while soybean exports are 30% lower.


If you guessed international competition – namely Brazil – you’d be right.

While shipments are down, US crop ratings are flat-to-higher. [1] The USDA reported that 60% of the US soybean crop is rated good-to-excellent (G/E), up 1 point week-over-week. US corn’s ratings were unchanged at 60% G/E

A drier week in the eastern Corn Belt offset rains in the Northern Plains and western Corn Belt.

More specifically, Illinois saw its soybeans’ rating drop 3 points to 60% G/E. [2] Illinois corn G/E ratings fell 8 points from last week to 54%!

On the flip side, South Dakota saw both its corn and soybean’s G/E ratings jump 8 points! Technically though, that means that South Dakota’s corn and soybeans are both seeing G/E percentages of 42%.

Thus, while you can argue that things haven’t deteriorated that much, the market seems to understand this morning that the ratings in a place like Illinois are a lot more critical to final production numbers than those in fringe acreage areas like South Dakota.

Farm Journal Crop Tour Day 1

Yesterday was Day One of the Farm Journal Crop Tour, and there was a quick rationalization that numbers aren’t necessarily adding up to what the USDA saw in their August WASDE report. As Dan Hueber explains, “maybe the data we get this week could shed a few rays of sunlight back on the markets” after what the grain markets eclipse that was the August WASDE. [3]

In South Dakota, the average yield was pegged at nearly 150 bushels an acre. This is down more than 6 bushels from the 3-year average of 156.1 bpa. [4]

Needless to say, western scouts, including our own Doug Kirk, are still looking for “perfect corn.” [5] For South Dakota soybeans, pod counts are down 12.5% from the 3-year average to just 889.6 per 3×3 square foot.

In Ohio, things are looking a bit better. The 3-year average corn yield on this tour is 158.8 bushels per acre. This year’s leg came in at 164.6 bushels per acre. For Ohioan soybeans, like those in South Dakota, numbers are lower. This year’s average 3×3 square foot pod counts came in at 1107, or nearly 6% less than that of the 3-year average of 1174.2.

Day 2 will see the western scouts head through Nebraska while eastern scouts will finish up Indiana and start into Illinois.

Anyone Bearish on Canola?

As we’re now in the second half of August, the rapeseed harvest in Europe is nearly done.[6] This according to EU grain trader Gleadell (via Agrimoney).who says that the global market will now be looking at the Canadian crop for price direction.

For perspective, average rapeseed yields are pegged by most firms just below 55 bushels per acre. This adds up to a crop of somewhere around 21.3 – 21. 6 million tonnes.

Comparably, the average Reuters’ analyst canola number for Canada is set at 18.6 million tonnes.[7] Lanworth is estimating 18.4 million. Oil World thinks that things could come in below 18 million tonnes.

The USDA has barely lifted a finger and is still sitting all the way up at 20.5 million tonnes. The current Agriculture Canada estimate is for 19 million tonnes.

We’ll know for sure in 9 days when Statistics Canada releases its first production estimates of the 2017/18 Canadian crop.

What that report shows will have some significant impact on the spread between canola and soybean prices. Today, canola is holding a $58/MT premium above soybeans. As per Agrimoney, hat’s up more than $60 from the $36 spread it was about a month ago. [8]

Tobin Gorey of Commonwealth Bank of Australia notes that the canola-soybean November contract spread has traded into the $70s in August in the past.  Regardless of what StatsCan’s numbers show though, the higher the premium gets, the more likely it is to fall back.

Why” you might ask? What you don’t hear from Mr. Gorey is how harvest pressures can kill a bullish move.

US Spring Wheat Harvest Surprises?

Yesterday’s US crop ratings showed that 34% of the American spring wheat crop is rated G/E, up 1 point from last week. From a harvest standpoint, 58% of the crop has been combined.

North Dakota farmers who have started into their spring wheat fields are finding better yields than anticipated. [9] This year, roughly 5.25 million acres of spring wheat got planted with spring wheat. That’s a 12.5% decline from 2016/17. The acreage is roughly split equally across the west, central, and east growing regions.

That said, western yields aren’t excellent but they are better than expected.

With numbers coming in somewhere around 25 to 35 bushels per acre, it’s not great, but a lot better than what you might expect with 100 degrees Fahrenheit temperatures and limited rainfall.

In the east, where rain did fall, things are looking much better / more average at around 45 – 60 bushels per acre.

For durum wheat though, 1.1 million acres got planted in North Dakota this year. Most of it was seeded in the northwest corner of the state, exactly where the drought was. The North Dakota Wheat Commission says that 44% of the state’s durum wheat crop was rated poor-to-very poor. 49% was ranked in fair condition.

As such, many farmers were expecting some meager yields (if their field wasn’t already baled). However, instead of the 10-15 bushels per acre, many seemed to be expecting, it’s coming in closer to 20 – 25 bushels per acre.

The USDA is forecasting an average yield of 24 bushels per acre for durum wheat in North Dakota. Keep in mind that last year that average was 40.5 bushels per acre (but it was one of the best crops ever).

Whether its durum or spring wheat crops, there’s going to be less of it coming out of the US this year. As such, buyers will be looking for both quality and quantity this year.

As you get into harvest, make sure to know the quality of your grain. You can quickly order tests from multiple independent labs at the same time through

To growth,

Brennan Turner
President/CEO | FarmLead
1-855-332-7653 (Toll-Free)
@FarmLead (on Twitter)

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.

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