Harvest is turning into just as big of a headache as many producers anticipated. Late planting this spring meant the crop was slow to mature, and the cold weather isn’t helping. Neither is the propane shortage plaguing parts of the upper Midwest.
As some farmers debate on leaving their corn crop in the field until spring, Arlan Suderman says this will also push back the timetable on when USDA will have an accurate measure of the 2019 crop size. He thinks the true crop size won’t be revealed until the 2020 September Grain Stocks report from USDA.
“We won’t know until September 30 of next year, unfortunately,” says Arlan Suderman of INTL FCStone. “We'll get better idea as we go through the year [because] each grain stocks report is going to give us a little bit more information we see the amount of shrinkage, we have fewer bushels coming out of the field and what we put into the bin, but unfortunately, it's going to be a long dragged out affair.”
He says 2010 could be a good case study, especially after the wet harvest in 2009.
“It's interesting to note if you look at 2010, June 30, 2010, that was the stocks report that started the next bull market,” says Suderman. “It was a huge surprise of bushels coming out, compared to what went into bin, showing feed usage about a half billion bushels larger than what was anticipated. So that's the type of thing that can happen. Unfortunately, though, with the big increase in acreage that may mute it for next year, because unless we have a weather threat next year, the expectation is we're going to grow stocks again.”
Matt Bennett of AgMarket.Net says even if it takes until September to discover the true size of the 2019 crop, he doesn’t think the market will lose interest. However, a lot can happen between now and next fall.
“Our demand looks a little bit better than what it did a month ago or six weeks ago,” says Bennett. “This was the eighth week in a row that we went through more corn in the usage of ethanol. We had good export numbers this week, relatively speaking. They weren't phenomenal, but at least we're able to see a little bit better export numbers again this week. So, we're definitely above the past four-week average. I think there's some things to be a little bit excited about.”
Bennett cautions that trade and trade deals will need to come through in order for that excitement to continue. If Congress can reach a deal on U.S. Mexico Canada Agreement (USMCA) before January, then some price support could enter the market. If not, prices could get worse.
“I don't think that we're going to get a whole lot cheaper on the cash price than what we’re seeing today, unless we just don't get the USMCA pass. Unless we don't get any sort of us Chinese trade deal. If those things happen or don't happen, it's going to be pretty tough to get people interested and excited and buying back into this market.
Watch the full marketing discussion this week on U.S. Farm Report.
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