According to Monday’s Crop Progress report, corn harvest is 73% done while soybeans lagged with only an additional 9%, making it 86% complete.
Harvest delays due to weather should give producers the opportunity to think about Friday’s Production Report and what it means for them. USDA should announce an increase in yield for both corn and soybeans.
The last Crop Production report in September listed corn at 155.3 and many analysts believe the report will show yield between 159 and 161 bushels. Anything above 161 bushels would be devastating to the corn market.
Add to this the potential reduction of corn in ethanol usage and it will be difficult for corn to move much above $5 next year unless a weather event is seen. In our opinion the market will move sideways to slightly higher through March and slowly grind lower unless a weather scare is seen during pollination. Producers should be considering calendar put spreads and positions in the market to either place hedges at prices where they feel comfortable selling their anticipated production or reownership.
As for soybeans, the September yield figure was 41.2 and expectations are slightly higher at 42.75 to 43.25. It is somewhat bothersome that soybeans cannot maintain their push higher with only slightly higher yields and good export inspections. South America is also getting timely rains that would imply the possibility for a record crop.
We will discuss spread strategies and how they work in our next blog. If anyone has questions and would like to discuss marketing strategies, call Bob or Laura (1-800-832-1488). We will also try to answer questions in upcoming blogs and we welcome emails to [email protected] or [email protected].
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