As expected, the harvest pace waned a bit last week, but we remain well ahead of last year and the five-year averages. As of the 26th, NASS estimates that 72% of the nation’s corn has been combined, which compares with a year ago at just 38% and an average of 56%. Of course, the 2019 growing season is one that many producers would prefer to just erase from their memories. For beans, 8% more were harvested, bringing the total to 83% complete. This compares with a year ago at 57% and an average of 73%. The only surprise in the update yesterday came via the winter wheat conditions, which was the first ranking for the season. 41% was rated good/excellent, which compared with a year ago at 56%.
Planting progress in Brazil has picked up a bit as, according to AgRural, 23% of the bean crop is now in the ground. This compares with an average for this date of 34%. Granted, the delay in planting is undoubtedly not fresh news and as such has already been kneaded into the price mix, but the reality is, harvest will be around two weeks later than usual this year, which could mean by that time, inventories in that country will be little more than fumes. In Argentina, soy planting may be 1% to 2% complete at best, with corn now estimated to be 27.5% complete. The average for this time of year would be 34%. Overall, weather conditions have been improving, i.e., additional rain, in both nations.
The moisture situation appears to have improved over in Russia as well. With around 94% of the winter crops planted, this is certainly welcome.
Is the EPA throwing the ethanol industry a bone? There are unofficial reports that the agency is considering a label change for E15 fuel. While no one has stated exactly how the change might read at the pump, there is speculation that the current verbiage that says that E15 fuel could be damaging to older vehicles could be toned down a bit. As a side note, at least one ethanol producer has decided that the grass is greener on the other side of the fence. Pacific Ethanol of Sacramento, CA., is planning to change its corporate name as it is shifting its primary focus to the production of alcoholic beverages, personal care products, sanitizers, cleaners, and pharmaceuticals. While possibly not a household name in the Midwest, Pacific purchased Illinois Corn Processing in Pekin, IL, in 2017.
The equity markets were not alone in witnessing a pre-Halloween scare yesterday as crude oil pressed down to the lowest level traded since the beginning of the month. The stimulus for the pressure in both markets was the same, though. Fears concerning additional lockdown measures around the world as the next wave of COVID cases continues to escalate. Brent futures have been contained between 43.50 and 39.30 for the better part of eight weeks now, and I would not be surprised to see this market take a dip to at least 35 with an outside shot at 31.25.
