USDA has released its last corn harvest progress report for 2009 and suggest 95% of 18 states which harvested 94% of last years corn production is complete. Within the National Agriculture Statistic Service’s report are a few surprises, one of which is how the harvest progress report for 2009 exceeded the average last release date of 5 weeks ago. That is correct, normally when the nation has reached a five year average of 89% five weeks ago, this year the harvest was only 54% complete.

            This year the U.S. is expected to produce 12.921 billion bushels of corn which remains only second in size to the 2007 record size of 13.038 billion bushels. With 95% of the corn production harvested, this suggests there remains 621.6 million bushels left in the field as of the last NASS report. Only in 1985 and 1992 did NASS release late reports which suggested the harvest was 91% complete in 1985 and 88% in 1992 when for the same week in 2009 corn harvest was 92% complete.

            Who has the most corn remaining in the 2009 field may come as a surprise in the form of 110.9 million bushels in Nebraska and then Illinois at 103.2 million bushels. These are the only two U.S. states with over 100 million bushels remaining to be harvested. Other significant others which bear noting are Minnesota at 85.5 million bushel, South Dakota at 82.8 million bushel and North Dakota at 67.8 million bushels. Interesting to note of the five major players which have significant amounts of corn remaining in the field four of them are in the west/northwest cornbelt. You may anticipate the corn basis to remain stronger than usual and into spring for these four western states as there remains an abundance of unharvested 2009 corn.

            2009’s corn harvest remains delayed and yet it is very important to remember as we prepare to enter the beginning stages of 2010 this is not a market which is demand driven such as soybeans but corn is a market which is supply restricted. Of the nearly 622 million not harvested, approximately 10% or 60 million bushels are expected to be lost as a result of field loss. The only true demand driver for corn is the ethanol market as profit margins remain positive. Allendale Inc believes USDA is overstating feed and export demand.

            U.S. corn producers and end users make note March corn futures prices remain in a range of 3800 to 4200, July corn futures 4000 to 4400 and in full carry mode of 19 cents.

            You be the Judge, are you anticipating higher prices to sell into and because driven by demand or supply restriction? Why are futures offering full carry and do you believe exports and feed use will be as strong as USDA believes? Do you have your marketing plans firmly in place?

 

 

 

 

 

Allendale Inc takes note when USDA released its first 2009/10 outlook in May of 2009, planted, harvested acreage, yield and end stocks have increased into the Dec 2009 WASDE  as well as usage for both domestic and exports. It is refreshing to learn as the 2009 crop production is a record, demand domestically and within the exports continues to support futures.

            We can look to the most recent domestic use chart which is the NOPA (National Oilseed Processors Association) soybean crush report which suggests a number of issues USDA addresses. First and foremost NOPA is running 7 million bushels less than later in the month U.S. Census Bureau reports but by Allendale Inc research suggest USDA must increase soybean use by 34 million bushels to a new level of 1.729 billion bushels or 4% more than year earlier levels. USDA must recognize at 160 million bushels of soybeans crushed for the month of November, they are 12 million bushels more than the previous record for the Nov 2006/07 marketing year. Dating back to the 2000/01 marketing year each month of Nov has been less than October by an ave of 4.67 million bushels. November of 2009/10 found 5 million bushels more soybeans than October’s 155 million bushels. Thus USDA must come clean and increase domestic use within the January 2010 WASDE report.

            As you are able to ascertain, the weekly exports sales graphic suggest a better than average start for the 2009/10 marketing year. Allendale’s custom chart suggest a pace which is much better than the five year average and well above the USDA pace required to meet USDA’s target of 1.34 billion bushels which is 6.3% better than USDA’s initial target of 1.26 billion bushels. Allendale Inc respects the fact shortly after the February timeframe, demand shifts from the U.S. to South America. This timeframe in question is monitored by Allendale on a daily basis and can designate a $4 per tonne spread between premium the U.S. vs South American supplies for May 2010 shipment. This well in favor of U.S. demand with only one real question, could cancellations be recognized for US soybean exports and how might it impact your local prices?  

 

 

 

 

 

 

 

Allendale Inc will note dating back to 1985 there are two similar years when the harvest progress of corn is near the delay we are presently experiencing. As of Sunday, Nov 29, 2009 the nation’s corn harvest is 79% complete and understandably delayed. This 79% completion level pales in comparison to a five year ave level of 97% and 94% last year. The question which is asked, can we anticipate USDA to decrease planted or harvested acres or could we experience a reduction in yield, production or end stocks and thus a rally in prices from the Nov to Dec WASDE?

            If we look at the two similar delayed harvested years of 1985 and 1992 you will need to be the final judge as to whether USDA has a surprise up its sleeve or not. In 1992 for the same week of the marketing year, the corn harvest was only 75% complete and in 1985 the harvest was 87% complete, no other two years have seemed so distant. Within 1985 there was no change within the yield, planted or harvested acres or production, end stocks or season average farm price for corn contained within the Dec from Nov report as well as the Jan from Dec USDA WASDE reports. Thus with 8% more of the nation’s 1985 corn harvest more complete than the 79% presently harvested the delayed harvested year was of little help from Nov to Jan.

            1992’s harvest at 75% was running at a 4% lesser pace than present and yet did not contain any significant surprises within the Dec WASDE. The only revisions we can find are a shade smaller end stocks in Dec WASDE report which increase the season ave farm price by 5 cents on the low and high end as well as a yield increase in the Jan WASDE report. It was within the Jan WASDE report that USDA did hold a major surprise by increasing yield by 2.1 bushel per acre and thus increased production and ultimately end stocks by 150 million bushels.

            Allendale Inc informs the producer of corn, when harvest can find two similar years to this years lag, there were no changes from the Nov to Dec with relationship to yield, planted or harvested acres. Only from the Dec to Jan 1992 WASDE report could we find a significant yield adjustment, and bearish to yield and ultimately end stocks. If there is any good news at least in the Jan WASDE, USDA did not lower the season average farm price.

            Allendale Inc did release its Dec 2009 production, U.S. and World end stocks date to official news agencies eight full days in front of the Dec 10, 2009 USDA WASDE launch. We are able to inform you, we did not change yield but did change end stocks for corn, soybeans and wheat. If you would like a similar copy e mailed to you, please contact us.
 

            Fundamentals suggest a weaker outlook for corn and wheat as they are not demand driven, soybeans are. Are we trading fundamentals, are you taking action of 2009 and 2010 crops?