NOW that the U.S. Department of Agriculture is open for business again, the market has a much better idea of how the corn and soybean crops are shaping up, and all signs point to bin busters.
When USDA released its first "Crop Progress" report in nearly a month, the trade was eager to find out how much harvest had progressed during the federal government shutdown. Corn harvest as of Oct. 20 totaled 39% of expected production versus a five-year average of 53% for that date, while soybean harvest totaled 63% versus a five-year average of 69%.
Based on the Sept. 30 edition of that report, farmers harvested 27% of the nation's expected corn production through the first three weeks of the month, as well as 52% of the nation's soybean crop. Farmers moved fairly swiftly to get beans in the bin, perhaps hoping to let Mother Nature pick up some of the tab for drying corn this fall.
Condition ratings for both crops improved through the course of October, according to the weekly report, which had not been issued for two consecutive Mondays during the extended government shutdown. Traders are largely expecting an average yield that's fairly close to USDA estimates at this point, although without an October "Crop Production" report, those estimates are about two months old at this point.
USDA informed the trade last Thursday that its Nov. 8 production report could potentially include updated planted and harvested acreage figures for corn and soybeans as well as a few other crops. The November report will include objective survey data such as corn plant population, number of ears, row width distribution, number of soybean pods with beans and so on.
One concern for the livestock industry, however, is that USDA will not include its forecast of harvested acres, yield and production for hay, canola or sunflowers. Estimates for those crops will, instead, be released in the annual crop production report in January.
Corn futures traded in a fairly narrow range last week, with the nearby contract shedding 1.25 cents through last Thursday's settlement. The market may be trying to find a bottom, although there isn't much bullish sentiment to push prices higher.
Cash corn prices fell a dime in most regions, with the basis not really encouraging producers to sell corn. It seems fairly likely that farmers will hold onto a good portion of the bushels coming out of the fields in hopes that better prices are ahead.
Soybean futures, meanwhile, held solid above $13/bu., up 18 cents from the previous week. Last Thursday's settlement of $13.0975/bu. indicated that the trade sees pretty solid fundamentals as well as supportive technical indicators in the market.
Soybean meal was particularly strong last week, with prices gaining nearly $16 per ton through Thursday's close. Solid feed demand and generally tight supplies continued to underpin the market.
In fact, the resilience of the soybean complex may be the one caveat to the presumption of lower feed costs moving forward. Traders will hold their breath until Nov. 8, when USDA will update its production estimates and balance sheet, but prices for soybean meal may stay much firmer, relatively speaking, than for corn.