August 25 – The Farm Journal Crop Tour Releases Estimates

On Friday, the Farm Journal Crop Tour reported its findings after two cohorts of scouts toured the Western and Eastern leg of the nation’s largest corn and soybean production states.

Our Doug Kirk was part of the record-sized pool of scouts. Final numbers were released shortly after open outcry ended in Chicago.

Before their release, corn prices and soybean prices reversed.

Here’s our recap from the Chicago Board of Trade.

Corn Prices Dip Ahead of FJ Tour Numbers

The September corn futures contract dipped 3.25 cents to close the day just a notch below $3.39. The December contract fell 2.75 cents to close the day at $3.535.

Data from the CFTC revealed that managed money is still short the market. On August 22, there was a total net short position of 17,073 contracts.

Meanwhile, on the global front, the International Grains Council cut its 2017/18 corn production estimate by three million metric tonnes.

Total expectations now sit at 1,017 million metric tonnes of corn.

But the real news is the final tally from this year’s Farm Journal Crop Tour.

Scouts said that the U.S. will grow 13.95 billion bushels for the marketing year. The signals about a 200 million bushel downturn from the UDSA’s recent estimate.

The crop tour’s yield estimate sits at 167.1 bpa.

That figure is lower than the 169.5 bpa that was featured in the August WASDE report.

Congratulations go out to Brennan who hit the number on the head. I had been projecting 169.9 bpa since last month.

On a state-by-state line, here are the results:

  • South Dakota: 138 bpa. Dry weather in the northern plains led to a big decline in yields.
  • Ohio: 163 bpa. Scouts indicated that the state had the highest amount of immature plants due to delays and replaning in the spring.
  • Indiana: 171 bpa. The scouts reported an uptick in annual grain length, but a decline in ear counts.
  • Nebraska: 180.5 bpa. As Doug told us earlier this week, scouts were impressed by crops in Nebraska.
  • Illinois: 181 bpa. According to reports, yields and crop quality were better in the western portion of the state.
  • Iowa: 183 bpa. Doug noted that Iowa had surprised some scouts, but that variability remained an issue.
  • Minnesota: 184 bu. per acre. This was the top state on the tour, as expected.

Soybeans Dip Ahead of Bullish FJ Report

Soy contracts were pushed lower on Friday.

The September soy contract dropped 2.25 cents to close at $9.39.

The November contract shed 2 cents to close at $9.445.

The U.S. government’s decision to place levies on Argentinian and Indonesian oils had fueled a bit of a rally in recent days. However, traders took some profits off the table today ahead of the Farm Journal crop report.

On the soybean front, the crop tour projects 4.331 billion bushels. That’s about 50 million bushels below the USDA estimates.

The scouts have also projected 48.5 bushels per acre, a figure below what the USDA projected in the WASDE report. Looking ahead, it will be interesting to see how the markets react to this figure. Following the crop tour, one has to expect that the USDA will likely revise its expectations downward.

Here’s a state-by-state recap.

  • South Dakota: 40.5 bpa. Reports indicated a number of flat pods, but as Doug explained on Tuesday, South Dakota is going to require a lot of rain to bring in any quality crop.
  • Minnesota: 48.5 bpa. The top corn state ended up seeing lower yields to its peers due to low pod counts.
  • Ohio: 53.0 bpa. Ohio will need more rain moving forwad, but this was the only state to see an annual gain in pod counts.
  • Iowa: 53.5 bpa. As noted this week, Iowa pod counts were lower than expected. Blame the hot weather that has punished various parts of the state with drought conditions.
  • Indiana: 54.5 bpa. Hopefully rains this week will improve pods, as counts were largely in line with figures from last year.
  • Illinois: 55.5 bpa. Scouts reported healthy crop growth, but noted a need for additonal rain.
  • Nebraska: 56.5 bu. per acre. Doug noted that there was some hail damage in the state, but it doesn’t appear to be serious enough to affect the end figure.

Chicago Wheat Prices Tick Higher

In Chicago, the SRW wheat September contract added 0.5 cents to close at $4.095 on Friday. The December contract dipped 0.75 cents to finish a tick above $4.35.

In Minneapolis, the spring wheat contract for September was flat and finished the day at $6.505. The December contract added 0.5 cents and closed at $6.69.

Down in Kansas City, the Hard Red Wheat contract dipped a penny to close at $4.045, while the December contract dropped a cent and closed just above $4.32.

Once again, speculative money has been shorting the market. CFTC data revealed that traders had a net-short position of -66,751 contracts in Chicago.

While the markets are still long in Kansas City, there was a rather large cutback in the total position.

Markets have been reacting to the International Grain Council’s decision to hike its production outlook by 10 million metric tonnes on Thursday.

The IGC now projects total output of 742 million metric tonnes.

On Tap Next Week

Looking ahead to next week, we’re going to be looking back on the markets over the month of August. More important, keep an eye out for a special update from our Doug Kirk as he recaps his time on the annual crop tour.

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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