Martell: Are Soybeans Better Than We Think?

August 20, 2012 07:30 AM
 

The following content was provided by meteorologist Gail Martell of MartellCropProjections.com:

 

Are Soybeans Better Than We Think?

Increasing Midwest rainfall in soybeans may be helping soybeans more than we think , though weekly crop ratings from USDA have indicated minimal improvement. As of August 12, US soybeans were 30% good-excellent, 32% fair and 38% poor-very poor. That was only a slight gain from the previous week’s 29% good-excellent, 32% fair and 39% poor-very poor.

Aug Rainfall in Soybeans

A new soybean ratings report due out today, reflecting conditions August 19, may tick slightly higher from favorable rains last week in two-thirds of the grain belt. Soybeans have received 2.14 inches of rainfall in August, and 86% of normal, through August 19. Drought easing rainfall was similar to 1988, the analog year for severe summer drought 2.06 inches and 84% of average to the middle of the month. In both cases, improving August rainfall followed an extremely hot, dry July that was very damaging for corn in the pollination stage.

United States soybean production in 1988 was under-estimated by USDA in the August 1 report pegging output at 1.474 billion bushels, compared to 1.549 billion bushels in the final analysis and 4.8% too low. United States soybean yield estimates increased 25.9 to 27 bushels per acre, September to the final report. Generous August rainfall increases the size of developing soybeans inside pods, perhaps making it difficult for growers to accurately assess yield potential.

Russia Wheat Production Revised Lower by SovEcon

SovEcon has issued a new lower wheat production estimate, now pegging the new wheat harvest at 39-41 million metric tons. The new wheat estimate compares to 43 million metric tons from USDA in the August report. Harvested yields have been coming in 29% lower than last season with roughly 50% of the grain crop in the bin.

May July Heat Stress

A wheat harvest near 40 million metric tons would be virtually identical to the 41.52 million metric tons of wheat gathered in 2010 in a historic drought. Both winter and spring wheat suffered from exceptionally poor weather conditions that included winterkill in the Krasnodar, claiming over 20% of the wheat harvest, and sudden, intense drought in the Volga Valley, emerging in May and persisting up to the August harvest.

Spring wheat prospects were severely damaged by unusual and intense heat, 6-8 F above normal in the May-July period. No doubt, the extreme heat set a record. For more on Russia wheat woes, read a comprehensive report at this link.

Talk of Russia wheat export restrictions has resumed. Strategie Grains, the noted Paris consultancy group, claims "regardless of what export tariffs or other measures may, or may not, be imposed, it looks as if Russian exports will run dry before we are far into the autumn."

Drenching Rains End Argentina Drought, Australia Rainfall Increasing

Argentina’s main grain belt has received drenching rains in August, sufficient to fully replenish field moisture ahead of spring planting. Corn seeding is due to begin in Buenos Aires province in mid September. Cordoba and Santa Fe growers usually begin seeding corn in October.

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Buenos Aires received 3 to 6 inches of rainfall this month, the wettest province in the grain belt, and leading wheat producer. Growers may considering planting more wheat, now that field moisture has improved, though seeding this late in the season would surely induce a yield penalty. Tres Arroyos, the main winter wheat area in southern Buenos Aires normally is planted in May. The USDA predicted a sharp cut in Argentina wheat plantings this season, down 24% from last year.

Australia winter wheat has received heavy beneficial rain in southeastern growing areas Victoria, southern New South Wales and South Australia. Severe drought in Western Australia has also eased in August with near-average moisture this month to date. Rabobank on August 17 pegged the new Australia wheat harvest at 25 million metric tons, down 1 MMT below USDA and 15.3% below last year’s record crop.

Very poor wheat planting conditions in Western Australia, the top producing state, from serious drought largely explains the reduced prospects. Generous rainfall in southeastern Australia is very welcome indeed. The Bureau of Meteorology anticipates an emerging El Nino in the coming weeks, pointing to drought in the Eastern Australia wheat growing areas.


 

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