Can We Bring These Crops Home?
The key question out of USDA’s August reports is “Can we bring these crops home?” says Dan Basse, president of AgResource. “The U.S. corn yield at 159.5 bu./acre is a record for an August report, as is the projected 41.7-bu. soybean yield. Will we see disease pressure or slow maturity trim those yields?”
Given that USDA did not change corn’s planted acres, we could bin the second-largest crop in history at 12.7 billion bushels. However, if this report’s demand numbers materialize, we’ll have record new-crop use as well, at 12.87 billion bushels, and stocks-to-use will be the lowest in three years, Basse says.
“That has hedge fund managers’ attention,” he adds. “They feel they need to get out of their short positions and move to the sidelines.”
AgResource had not recommended any cash sales of new-crop corn or soybeans as of Aug. 3 (see graph below), in keeping with his somewhat bullish stance. —Linda H. Smith
Key Market Factors
> USDA’s August corn and bean yield estimates would be new records.
> Will there be early frost?
> Watch developing dryness in the Southern Hemisphere.
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Gamble on Frost?
“I worry that many farmers are just gambling an early frost will boost prices,” says Richard Brock of Brock Associates.
Because of lack of growing degree days, we are more at risk in more areas this year than last year, says Allen Motew of QT Weather. “But frost damage is a complex issue and this time of year can’t be predicted accurately more than five days out.” —Linda H. Smith
Top Producer, September 2009
