Row crop prices soften ahead of a big harvest weekend.
This morning, a mixed grain trade is featured with wheat firm and row crops soften with the onset of the first large harvest weekend. This is bringing hedge sales into the marketplace, as stated Thursday morning could be a probability. A strong price lift from last Friday's low is being checked by row crops. Interestingly, cash corn bids remain exceptionally strong with the onset of harvest but will weaken amid the advancing harvest implying old crop supply numbers are tighter than the USDA is reporting. Currently, Council Bluffs Iowa is paying $.65 over with Minneapolis $.50 over and Central IL $.10-.40 over. The competition for the early harvested corn is keen to refill the cash pipeline.
Next week's progress reports anticipate that 8-10% of the US corn crop will be harvested through Sunday. The exceptionally dry and warm September weather is pushing crop maturity with considerable disease pressure, causing crops to die prematurely. This has been creating disappointing early harvest yield data on corn where a lack of fungicides was utilized. Soybean harvest should get underway later next week, with test cuts being closely watched.
Dryness in South America is becoming pronounced in yesterday's NOAA 4th quarter assessment of La Niña development is concerning. Argentine farmers are starting to plant corn in the hopes of planting record area. At the same time, the IRI International Weather Service places high odds in a developing drought for N Argentina and S Brazil. With world exporter corn stock/use ratios at record lows, the marketplace is carrying hopes that South America will replenish these numbers this winter. However, a lot is riding on South America, and as those hopes diminish, prices will experience upward pricing pressure.
The current US weather forecast shows an ongoing arid weather condition for the Plains over the next two weeks. A storm is positioned over Nebraska morning, but otherwise, the outlook holds limited rainfall for the entire Plains looking forward into October. The pure lack of rain will cause a struggle for winter wheat seeding/germination while pushing ahead the harvest. The Central US will hold in a warm/dry weather trend with summerlike high temperatures in the upper 70's to the mid-90's for another 5 days. There will be cooling back to near to below normal in the 6-10 day period for the Eastern US before the Western US Ridge rebuilds. Amid a strengthening La Nina, the Western US looks to hold in an arid weather trend well into October. Dryness across the Plains and the South West Midwest is becoming noted for winter wheat planting.
Cattle futures softened again yesterday while nearby feeder cattle found support with corn retreating from his early-week advances. Cash cattle markets in the Plains were at a standstill on Thursday following Wednesday's trade. The boxed beef market continued to correct. The choice-value was down $1.82 at $318 and select fell $3.62 to $280.27. The choice/select spread was a record $37.23 choice premium. Weekly beef exports were slightly below average at 37 Mil Lbs, with 18% of the week's shipments loaded for China. Weekly sales were at a 7-week high of 34 Mil Lbs with 24% sold to China. Cumulative exports are now 118% of last year, and outstanding sales are 127% of a year ago. Both are record large.