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GRAIN MARKETS: Is corn harvest finally halfway complete?

Small price changes amid slow harvest pace, big world supplies.

By Ben Potter

Industry analysts say the 2017 corn harvest may have made it past the halfway mark, at 52% complete – a full 23% slower than the five-year average. Sluggish harvest pace was countered by big global supplies, however. Corn prices ended the day unchanged, with small losses for soybeans and winter wheat, and small gains for spring wheat.

The forecast for Halloween is scaring up light rain tomorrow in parts of the Midwest – most likely in the Dakotas, Minnesota, Wisconsin and Michigan. After that, weather forecasters are calling for a slightly cooler-than-normal November in the western Corn Belt, versus slightly above-normal temperatures in the eastern Corn Belt.

Investors didn’t appear concerned by today’s indictment of former Trump campaign manager Paul Manafort, but stocks did bristle at the idea of a “gradual phase-in” of the President’s proposed tax cuts. The rate could lower from its current rate of 35% by 3% per year through 2022 instead of all at once. By midafternoon trading, that had the Dow 69 points lower, to 23,303. Energy futures were mixed, with crude oil and diesel prices up, and gasoline prices down.

Corn prices traded in an extremely narrow range for most of the days, with December futures finishing Monday unchanged, at $3.4875. March 2018 futures gained 0.25 cents to close at $3.6275. 

Ahead of Monday afternoon’s latest crop progress updates from USDA, a group of 10 analysts predict the corn harvest has crossed the halfway mark, to 52%. A week ago, USDA estimated harvest was 38% complete. Last year at this time, corn harvest was already 75% complete. Farm Futures, which participates in these surveys, estimates corn harvest has reached 53% completion. 

Weekly export inspections for corn slipped from a week ago, with 20.4 million bushels, and failed to meet trade estimates of 73 million to 91 million bushels. Last week’s volume was 25.0 million bushels, with export inspections of 34.7 million bushels a year ago. Totals from the 2017/18 marketing year, which began September 1, are up to 199 million bushels – well behind last year’s pace of 364 million bushels.

Preliminary volume estimates were for 161,959 contracts, down significantly from Friday’s total of 249,087.

Soybean prices were hurt by rain in Brazil and a round of technical selling on Monday, with November futures finishing 2.5 cents lower on the session, down to $9.7275. January futures dropped 2 cents to close at $9.8450.

Ahead of Monday afternoon’s crop progress updates from USDA, a group of 10 analysts predict that soybean harvest has reached 83%, up 70% from a week ago and slightly behind the pace of 2016, which was 87% complete by October 30. Farm Futures, which participates in these surveys, estimates soybean harvest has reached 81% completion.

Soybean export inspections totaled 92.1 million bushels last week. That bested the average trade guess of 73 to 91 million bushels, but failed to match last week’s pace (95.0 million bushels) or the pace from this time last year (109.8 million bushels). Year-to-date volume slips further behind the pace of 2016, with 454 million total bushels compared to 501 million bushels a year ago. 

Farmers in Goias, located in central Brazil, have only planted 6% of the 2017/18 crop (compared to 42% the year prior) due to dry conditions. However, Brazil’s fourth-largest soybean producer is expected to pick up the pace after some recent rainfall. Crops will probably need to be planted by around November 10 to avoid significant production losses.

Protein content in the U.S. crop may be a concern, as preliminary data in an annual soy quality survey suggests the crop might only average 34 to 34.5% instead of the usual 35%. That can in turn can lead to lower-protein soymeal, which would affect processors and other downstream users.

Preliminary volume estimates were for 331,312 contracts, down moderately from Friday’s total of 371,741. 

Wheat prices fell a fourth straight day on continuing concerns over low demand and high supplies. CBOT new-crop futures were down even despite lower expected soft red winter wheat acres for 2017/18. MGEX Spring Wheat bucked the trend, however, with December futures rebounding 1.5 cents to close at $6.1775.

Wheat bounced back from a 2017/18 marketing year low of 6.3 million bushels with a total of 11.6 million bushels in export inspections. That hit the low end of the average trade guess, which was 11 million to 18 million bushels. It was also lower than the rate needed to meet USDA’s forecast (18.3 million bushels per week at this point). Year-to-date totals (408 million bushels) are slightly below this time last year (428 million bushels).

Ahead of the next USDA crop progress updates, a group of 10 analysts estimate the 2017/18 U.S. winter wheat crop is now 85% planted, up from 75% a week ago and in line with last year’s pace of 86%. Analysts said 60% of the crop will be rated good to excellent so far. 

Saudi Arabia has purchased 17.8 million bushels of hard wheat, split among eight cargoes from Cargill, Holbud Limited, Louis Dreyfus, Baywa and Union Invivo, for delivery in December and January. So far this marketing year, Saudi Arabia has purchased 92.2 million bushels of wheat.

Preliminary volume estimates were for 89,888 CBOT contracts, down slightly from Friday’s total of 102,540.

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