Hurry up and wait

Published on: 10:03AM Nov 05, 2019

Grain and soy markets are playing role reversal this morning as they continue to chop aimlessly in front of the November crop production reports. As expected, trade estimates have been released, and for those, I have seen break down as follows; Corn production is estimated to come through at 13.623 billion bushels coming from 81.39 million harvested acres and a yield of 167.4 bpa. This compares with 13.779, 81.815, and 168.4 last month. For beans, we find an average trade production estimate of 3.512 billion bushels from harvested acreage of 75.36 million and a yield of 46.6 bpa. 2019/20 corn ending stocks are estimated to come in at 1.808 billion, compared with 1.929 last month, beans at 430 million versus 460 in October, and wheat at 1.032 billion instead of 1.043.

It seems that the corn market especially could use a shot of positive adrenaline as we certainly have not received any help from the export scene. The weekly inspections came in below expectations again last week as we loaded out just 10.8 million bushels and are currently running, or maybe I should say crawling along 62% below this time last year. Soybean inspections were the second-highest of the marketing year (the previous week being the highest) at 54.4 million, and we now stand 11% ahead of last year's pace.

The pace of corn harvest was just behind trade expectations, coming in at 52% complete, versus an expected 54%. Of course, this is well off the historical average of 75% complete at this time. Tennessee and North Carolina tied for the most competed at 99%, and North Dakota remains at the bottom with just 10% complete compared with the average 60%. Soybean harvest increased by 13% and has reached 75% complete. This was right on trade expectations and sat 12% behind the norm. Louisiana was at the top of the list with 99% complete. The state at the bottom of the totem pole was North Carolina, with 45% harvested, but that is actually 4% ahead of average. Second from the bottom was North Dakota, with 56% complete, which compares to an average of 95%, but they still increased 27% last week. Winter wheat conditions improved 1% for the week and stood at 57% good/excellent, which is 6% better than a year ago.

Looking to the Southern Hemisphere, according to the Buenos Aires Grain Exchange, 40.2% of the corn is now planted and around 4% of beans. In Brazil, AgRural estimates that soybean planting moved up 12% to 46% complete, which is off of last year's pace of 60% but now 1% ahead of the historical average. Overall weather was dry last week, but there are forecasts for better coverage next week. Full-season corn planting is estimated to be 68.5% complete. Unfortunately, I will not have an opportunity to go to any rural areas, but I am headed for Sao Paulo next week to speak at Summit Agribusiness Brazil 2019. Last I checked, there was rain in the forecast for each day that I will be there.

Reportedly the search is ongoing for a location for President Trump and President Xi Jinping to meet and put their signatures on Phase 1 of a new trade agreement. While no one appears to be suggesting there will be a holdup, but reportedly, China is pushing for the U.S. to lift or reduce some of the increased tariffs that have been placed on good coming from that nation.

If higher meat prices, especially pork, were not enough for the Chinese consumer, it turns out that they have been paying dearly for cooking oils as well. Just the fact that they have been forced to eat less pork and more to alternative meat such as chicken, which has far less fat, the fact that the crushing industry is making less feed for hogs has reduced the supply of soybean oil that is available. The price of that product, this week reached the highest point since March of 2017.