Regardless of strong yields, prices are finding a footing. What farmers need now is some traditional fall weather.
With October only a week away, harvest progress and conditions are consuming the market’s attention.
As of Sept. 18, 9% of the U.S. corn crop has been harvested, which compares to a five-year average of 12%. Farmers in states like Kentucky, North Carolina and Tennessee are significantly ahead of schedule, while the rest of the Midwest is still just getting started.
Soybean harvest progress is right in line with the average pace. As of Sept. 18, 4% of the nation’s crop has been harvested, which is only one percentage point behind average.
Corn and soybean prices were both down for the week, says Jerry Gulke, president of the Gulke Group, but prices are relatively stable.
“We’ve been kind of going sideways here,” he says. “Here we are just marking time—the market is concerned with how soon we can put this crop away in the bin.”
Harvest delays caused by heavy rains and flooding in states such as Iowa, Illinois and Minnesota, are actually helping remove some of the negative attitude in the marketplace, Gulke says: “The elevators were worried how they were going to store all the corn, these delays looks like they might help them deal with movement of this huge crop.”
Luckily, Gulke says, the excessive moisture farmers are receiving now shouldn’t knock their yields severely.
“Getting rain now means you pretty much know what you got out there,” he says. “You need to kill this crop in the spring or the summer. It is pretty hard to do away with a lot of corn in the fall just because of the moisture.”
These weather challenges can still create quality issues, however. Gulke says he's seen photos and heard reports of some corn cobs deteriorating from within, mold damage and stalk issues.
“It almost feels like we are still in the summertime with these high temperatures,” he says. “What we need is for fall to come on. Once you cool it down, it will help the situation.”
While a lot of the mold can blow out of the back of the combine, Gulke points out, it does raise concerns that some infected grain could be rejected by buyers or farmers will face storage issues.
“We just don’t need any more 85-degree temperatures and high humidity,” he says.
South America Crop Update
While farmers in the U.S. are focused on harvesting a potentially record crop, traders are also watching crop conditions in South America.
“We pretty much expect that crop in South America to be average,” Gulke says. “Argentina will increase corn acres significantly at the detriment of soybeans, but Brazil could make up for some of the shortfall in beans.”
More time will be needed to see how those countries’ crops eventually turn out. “We really don’t get excited about South America’s crop weather until December,” he says. “We have a lot of things to think about here.”