August 23 – A Farm Crop Tour of Averages

Grain markets were largely flat Wednesday as traders kept an ear out for anything definitive from the annual Farm Journal Crop Tour. As FarmLead’s Doug Kirk told us this morning, this year’s tour is revealing that the crop in the fields is looking like a string of averages.

The USDA had set some lofty yield averages in its August WASDE report, and many farmers responded with confusion, disillusionment, and distrust with the methodology process.

But this year’s farm tour has yet to discover any major deviation from the agency’s report. With that in mind, let’s take a look at our recap of the grain markets from the Chicago Board of Trade on August 23.

Corn Prices Slide After Crop Tour Update

The September corn futures contract dropped 4 cents Wednesday to close at $3.42. The December corn futures contract slipped 4.25 cents to finish a notch below $3.56.

Once again, traders were reacting to Tuesday night’s updates from the Farm Journal Crop tour. Last night, the tour reported average yields in Nebraska at  165.42 bpa. That’s about a 3-bushel decline from the three-year average.

Meanwhile, in Indiana, the average yield came in at 171.23 bpa. That’s about 4 bushels more than the three-year average.

Our Doug Kirk will continue to be on the road with the western leg of the FJ Crop tour and will be offering his breakdown of what he’s seeing later this week. The crop tour took him today from Nebraska City, Nebraska to Spencer, Iowa.

Tomorrow, the four-day western leg will conclude in Rochester, Minnesota.

On the global front, we’re still hearing a lot about the size of the Brazilian crop and its impacts on the global markets.

Meanwhile, China released updated trade data on its July imports. The nation imported more than 913,000 metric tonnes of cour last month, its fourth-largest import figure on record.

Soybean Prices Flat 

The November soybean futures contract was up a half-cent to close at $9.38. Meanwhile, the January soybean futures contract dipped 1 cent to close at a tick below $9.47.

Once again, we’re waiting for updates from the Farm Journal Crop Tour.

As Brennan noted this morning, Nebraska saw soybeans pod counts of 1131 per 3×3 square foot. That figure is more than 4% lower than the 3-year average of 1182.1. [1]

Prices received some support today from the bean oil markets. The United States announced it had unveiled an anti-dumping duty on Argentinean and Indonesian biodiesel imports. The duty is expected to press more companies to engage in domestic manufacturing of the product.

According to reports, the duties will range between 40% to 68%. Don’t expect a lot of imports from these regions moving forward.

Following the announcement, Rabobank immediate slashed its expectations for U.S. soyoil inventories by a whopping 500 million pounds.

This “would reduce 2017-18 US ending stocks to some of their lowest levels in 20 years.” [2]

Wheat Prices Tick Higher

In Chicago, the September SRW contract finished the day up 1.5 cents to close at $4.30.
Down in Kansas City, the Hard Red Wheat contract hit its lowest front-month price since December 2016.  The September HRW contract dropped 1.25 cents to close below $3.98. The December contract was also off 1.25 cents to finish near $4.26.
In Minneapolis, the September 2017 was off 1.75 cents to close at $6.395 per bushel. The December contract added 0.75 cents at $6.57.
Despite the recent weakness in wheat prices, Commerzbank predicted a supply in the European markets and a possible pop in prices in the future. [3]

The EU Takes Action

Finally, the European Commission has launched an investigation into the planned takeover of Monsanto Company by Bayer AG. The $66 billion deal has raised concerns about competition in the marketplace, particularly in the pesticide and seeds markets.
Expect to hear about a number of proposed concessions, as the current deal did not go far enough for the antitrust leaders. While the United States is typically a bit more lenient, the EU commissioners are concerned. A final decision will come in January 2018.

Looking Ahead

On Thursday, we’ll be looking for updates on export numbers and insight into the state of crops from the Farm Journal Crop Tour.
Check back in with the Breakfast Brief tomorrow for more results from the road.
About the Author
Garrett Baldwin

Garrett Baldwin is a content strategist and editor at FarmLead. He covers the global grain markets and public policy issues related to the agricultural industry. He is a graduate of the Medill School of Journalism at Northwestern University. He also holds a Master’s Degree in Economic Policy from The Johns Hopkins University, an MS in Agricultural Economics from Purdue University, and an MBA in Finance from Indiana University.

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