Is current crop progress an indication of better grain prices?
“A great accomplishment shouldn’t be the end of the road, just the starting point for the next leap forward.”
– Harvey Mackay (American author)
At 7:25 AM CDT in the North American futures markets (*not cash prices*):
(all prices in dollars per bushel unless otherwise indicated)
$1 USD = $1.2639 CAD, $1 CAD = $0.7912 USD)
Dec Corn: -1¢ (-0.3%) to $3.503 USD or $4.427 CAD
Jan Soybeans: -2.8¢ (-0.3%) to $9.883 USD or $12.491 CAD
Dec Soybean Meal (per short ton): -$0.20 (-0.05%) to $315.70 USD or $399.01 CAD
Dec Soybean Oil (cents per lbs): -0.19¢ (+0.05%) to 34.44¢ USD or 43.53¢ CAD
Dec Oats: +3¢ (+1.1%) to $2.765 USD or $3.495 CAD
Dec Wheat (Chicago): -2.3¢ (-0.5%) to $4.345 USD or $5.492 CAD
Dec Wheat (Kansas City): -2.3¢ (-0.5%) to $4.313 USD or $5.451 CAD
Dec Wheat (Minneapolis): -1¢ (-0.15%) to $6.14 USD or $7.76 CAD
Jan Canola: -1.1¢/bu / -$0.50/MT (-0.1%) to $9.159/bu / $403.83/MT USD or $11.576/bu / $510.40/MT CAD
Yesterday’s Winnipeg ICE Close
Dec Barley: unchanged at $2.55 USD or $3.222 CAD
Dec Durum Wheat: -2.7¢ (-0.35%) to $5.986 USD or $7.566 CAD
Dec Milling Wheat: +5.4¢ (+0.85%) to $5.017 USD or $6.341 CAD
Knowing What’s Next in Grain Markets
Grain prices this morning are mostly lower as the complex pulls back from yesterday’s green session.
Wheat prices gained yesterday on some profit-taking via spread unwinding and short covering. Since spring wheat prices didn’t gain much, the spread between winter and spring varieties has narrowed (hence the term, “spread unwinding”).
For those who may not know, spread unwinding is when a market participant makes a bet on the difference between one derivative (i.e., KC hard red winter wheat futures) and another (i.e., Minneapolis hard red spring wheat futures) either widening or narrowing. The difference in value between where the “spread trade” was initiated and where it is unwound is the participant’s profit/loss.
Today’s action will be important though as it offers the opportunity for wheat prices to move higher after yesterday’s momentum.
One of the headwinds that grain prices would face is the U.S. Dollar. With a couple of reports out this week, including American GDP growth numbers, the American Greenback seems to be getting stronger.
In the past month, the U.S. Dollar has gained 2%.
It’s still down nearly 8.5% from where it began 2017.
What’s next after that? The next few weeks will be important to getting the American crop off the field and the South American crop in.
US Crop Progress Update
As Garrett mentioned in Grain Markets Today, the American corn harvest is only at 38% complete. This figure means that just 10% of the US corn crop got combined last week as rains in the Corn Belt and American Midwest continue slow field activity. Better harvest weather expected this week though across America. 
The USDA’s weekly crop progress report says that this would be 21 points behind the 5-year average of 59% harvested by this time. 
The market was expecting a corn-harvest-complete number of 44% yesterday. As such, the lower actual number is seen as bullish.
With that, December corn prices on the Chicago Board of Trade finally climbed above $3.50 USD / bushel.
What’s interesting to note is that the USDA raised the percentage of the US corn crop rated good-to-excellent (G/E) for the 4th straight week. 65% of the American corn crop is now considered to be in G/E condition.
At the end of September, it was 61%.
The US soybean harvest is 70% complete, which is in line with the five-year average and the market’s expectations.
75% of the 2018 US winter wheat crop has now been seeded. This number is a little bit behind the five-year average of 80%, but it’s what the market was expecting.
The slightly behind-average seeding schedule is likely why the part of the wheat crop emerged is at 52%. This figure is also 5 points behind the average of 57% for this time of year.
Crop Progress Around the World
Brazil has received some rain, but temperatures are still high, meaning the need for moisture still exists. There are some rains in the forecast, but planting remains behind last year’s torrid pace.
About 25% of Brazil’s soybean area has been seeded, including Mato Grosso jumping 11 points in 1 week.
The fall-seeding campaign has been slowed in northern Europe and Baltic states (i.e., Latvia, Lithuania, and Estonia) because of some “excessive moisture,” according to MARS, the EU’s agronomy division. 
Conversely, lower precipitation totals since September in southern Europe and northern Africa hasn’t helped winter crop prospects. Areas that are affected include southern France, western Italy, Greece, Spain, Portugal, Algeria, and Morocco.
Ironically, the areas that produce the most grain haven’t been harmed too bad. Winter crop seeding in Germany, France, and Poland was generally uninterrupted and earlier than usual.
Switching continents, harvest 2017 is still inching along in Northern Alberta. 
About one-third of the crop up there still needs to be combined. Unfortunately, temperatures in Western Canada are forecasted to head lower as we end October.
In our conversations with FarmLead users in both Canada and America, better-than-expected yields are heard.
Quality is still important to many buyers, especially in cereals. This is why we recommended knowing your grain’s quality and ordering some inspections via GrainTests.com.
We’ve seen some users double the price of their grain by knowing some key quality parameters.
However, there seems to be a lot of malt barley out there that’s meeting requirements. Conversations with we’ve had with most buyers suggest they’re not looking or too desperate to find the product (as it’s readily available).
The unfortunate fact though is if malt barley prices stay where they are, we might see lower acres next year in 2017/18.
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.