Harvest Update and A Cold, Wet Forecast

Update for November 21st, 2018

Historically the corn market tends to follow the trend in crude oil with the exception of this last surge in oil prices. Unfortunately the massive drop in oil prices is putting pressure on the corn market as are the large ending stocks which are expected to be the 3rd largest ever, after 2016 and 2017. If oil prices continue to fall the push for E15 will becomes less important and add further stress to the ethanol industry.

Late last week the USDA reported the U.S. corn harvest is 84% complete compared to 81% a year ago and the historical average of 87% for this date. Some of the states that have fallen the furthest behind their average are:

· North Dakota -16% behind normal = 38% of the corn crop is still in the field.

· South Dakota -14% behind = 29% left to harvest.

· Nebraska -9% behind normal pace = 23% still needing to be harvested.

· Iowa is currently -5% behind their average = 17% of corn acres still in the field.

The chart below is an estimation from the Van Trump Report based on figures from the USDA.

The most recent news from the White House regarding trade tensions with China is encouraging. The two countries have several issues that need to be resolved but are narrowing discussions to a few of the major problems. The White House has said that they do not see the need for additional tariffs now that China has stepped forward and is prepared negotiate. Soybean exports have increased in last week’s report to 17.3 million bushels up from 14.3 million the previous week. While this growth is good we are far below last year’s volume of 40.6 million bushels for this same week just a year ago. U.S. Gulf soybeans are currently the cheapest in the world this has increased our exports to other nations which has helped fill about 40% of the hole left by China. At this point the U.S. soybean market is struggling to find what price equilibrium futures should be, but a trade agreement with China would mean the difference of a carryout of 750 million-vs-1 billion bushels.

The USDA reported that as of last week the soybean harvest is 88% completed vs the historical average of 93%. The states that are lagging furthest behind their historical average:

· Kansas -16% behind = 26% of crop still unharvested.

· Missouri is -15% = 30% unharvested.

· Ohio is -10% = 15% still needing to be harvested.

· North Dakota -8% = 9% standing in the field.

· Nebraska -5% = 6% unharvested.

· Iowa is 3% behind = 6% of the crop unharvested.

· Illinois -2% = 6% behind.

· South Dakota -3% = 4% still unharvested.

· Minnesota -2% = 3% standing in the field.

· Wisconsin -8% = 15% unharvested.

· Indiana -1% behind = 9% still left in the field.

The chart below is an estimation from the Van Trump Report based on figures from the USDA.

Keep in mind that a large portion of these unharvested corn and soybean acres located in Missouri, Kansas, Ohio, Illinois, Iowa and the Dakota’s. Producers in these areas are facing exceptionally challenging conditions with unseasonably cold temperatures and strong wintery conditions.

Long-range forecasts from the National Weather Service for next week show slightly above normal precipitation is expected across the Heartland as we move into December. The Corn Belt will continue to see below normal temps.