The Spectacular Finish That Never Was (September 11)

Two weekends ago, it was Harvey in Texas and Louisiana.

This weekend it’s the hurricane Irma that bears down on the southeastern US.

Given the lives lost, disrupted and displaced, what does a Central Illinois corn and bean farmer have to complain about?

Not complaining… Just reporting

We grew record to near-record crops on our farms in 2014, 2015 and 2016.

Both corn and beans benefited in Central Illinois from nearly perfect finishes to those growing seasons.

But 2017 has proven to be different.

In August we found tip-backed ears of corn. In September, we are considering flat pods, small pods, and smallish bean size. The spectacular finish we wanted never materialized.

Soybeans are a “tropical” plant of origin. Late season heat and rain equal yield. But Illinois recorded its 12th coolest August in history and just less than half of its average rainfall.

close-up-aborted-soybeans-central-illinois
Aborted Soybeans Pods in Central Illinois

 

On our farms, we predict our earliest planted and earlier maturing beans to be our best yielders. The later planted later maturing beans are turning yellow now; rains could still help them some but to a lesser extent each day.

Low Prices, High Expectations

Just like the past three years, we’ll have plenty of 70-bushel beans in our fields. Unlike the last three years, we’ll have 50-bushel beans to go along with them.

For the first time, the national bean yield exceeded 50 bushels per acre last year. Some folks wrote about a new paradigm in bean yields thanks to improved genetics. I didn’t bite.

From South Dakota to Nebraska, through Iowa and into Minnesota I toured fields in late August and found lower pod counts, more flat and flattening pods and more single or two-bean pods than in the last three years. This isn’t 2016.

In August the USDA issued a prediction of a national bean average of 49.4 bpa which would be the second-highest yield ever achieved.

We’ve only had three years that national yields exceeded 45 bpa and they occurred consecutively from 14 to 16. We’ve established that this isn’t the 50 plus bpa growing season that was 2016 but let’s assume that turns out more like 14 and 15.

National yields those years were 47.5 and 48. Splitting the difference and using August acreage numbers and demand, a yield of 47.75 would decrease the carry-out in soybeans by 167 million bushels to about 310 million bushels.

Certainly, this would give the market a story to trade and perhaps a chance for farmers to secure higher prices. You could argue a challenge of the July high in November soybeans would be possible.

Our FarmLead.com customers across the Midwest are looking for lower yields year-over-year.

I agree.

If acreage holds constant and overall supply shrinks, then something has to give to slow consumption: higher prices.

First September, then October

I like pleasant surprises. Those not so pleasant…not so much.

August, October, and January are the report months that historically shock the markets most based on the yield expectations and acreage changes they provide. September sneaks in there and can surprise especially in years when the weather advances the growing season at a faster than normal pace.

The trade is looking for lower yields this Tuesday in the WASDE update which will be released at 11:00 central. For corn, the trade guesses 167.9 down about a 1.5 bushel, and for soybeans, the guess is 3/4 a bushel lower at 48.7 bpa.

The cool finish to the growing season has slowed things down. I think we’re more likely to be surprised by yield and acreage revisions in the October report than in this week’s September update.

Satellites vs. Leather Boots

If you’ve been reading along or listening to me much lately, then you know that I think USDA is too high on yields and perhaps significantly so in soybeans.

I should point out though that the satellite forecasters see things a differently. Those guys—some of whom have had success in recent years—are pretty well holding the line at or around the yields that USDA forecasted in August.

Whether boots on the ground or satellites in the sky proved to be right about the size of this year’s crop is yet to be determined. What I know is that on my farms and in the fields I’ve walked these last months, we needed a really good finish to realize maximum potential.

Instead, the spectacular finish that we needed never was.

Doug Kirk is a Central Illinois Farmer, he is a FarmLead PowerUser and grain market enthusiast. He welcomes your feedback and conversation. Reach him in the FarmLead Chicago office at 312-459-6149, email to d.kirk@farmlead.com or on Twitter at @iplow1.

On September 12, 13 and 14th, Doug and other members of the FarmLead team are in Fargo, North Dakota at the Big Iron Show. They hope you’ll stop and say hello.

About the Author
Doug Kirk

Doug Kirk is a Central Illinois Farmer, a FarmLead PowerUser, and grain market enthusiast. He welcomes your feedback and conversation. Reach him in the FarmLead Chicago office at 312-459-6149, via email at d.kirk@farmlead.com, or on Twitter at @iplow1.

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