Update for August 26, 2021
U.S. corn in GD/EX condition fell this week by 2% down to 60% vs the average of 65%. A few results from this week’s crop condition report:
· Illinois saw a big 7% reduction to 67% in the GD/EX corn rating
· North Dakota has a low 16% of the corn crop in GD/EX condition
· South Dakota 25% GD/EX
· Minnesota 34% GD/EX
· Iowa currently has 58% of the corn crop rated GD/EX
Mexico made a large purchase of U.S. corn this week and considering current conditions in SAM and long-term outlooks it appears that it may only be a matter of time before more demand moves to the U.S. market. NOAA’s long-term weather models are showing an increased chance of another La Niña developing once again in the coming months. A La Niña weather pattern in SAM was responsible for the dry conditions that cut yields this past season. Right now, the USDA is still calculating that Brazil will have a normal growing season and is projecting Brazil’s corn production at 118 MMT’s, keep in mind that due to this season’s dry conditions production estimates for the current season crop have been reduced to 87 MMT a whopping 31 MMT’s less.
This week’s GD/EX rating for the U.S. soybean crop was reduced by 1% down to 56%, but remember that a small drop in crop ratings each week are common at this point of the growing season for both soybeans and corn. This week China returned to the U.S. soybean market purchasing another 4 to 6 cargo loads. While the Chinese are much more active in the U.S. soy market than we typically see for this point of the year but exports are still far behind where they need to be to reach USDA targets.
As we move closer to harvest so many questions remain. Will the Chinese be large buyers of U.S. corn and soybeans again this year? Will SAM actually see 2 consecutive growing seasons with La Niña conditions in place? How many additional soybean acres will SAM producers actually plant this year? EPA rulings regarding biofuels mandates levels are continually in question causing market instability so what will the final decision be for 2020 and beyond? What will the final U.S. 2021 corn and soybean yields be, because currently there are many estimates that vary widely? How many corn acres will U.S. producer’s plant next season? Marketing your crop is never easy but this year seems exceptionally difficult.
The photo above taken on July 29th, 2021 shows the dry riverbed of the Old Parana River which is a tributary of the Parana River. Argentina’s National Water Institute says current water levels are the lowest since 1994 but by September water levels in several provinces will reach their lowest ever. (AP Victor Caivano)
Argentina’s “superhighway” has already complicated the movement of products along the Parana River. NOAA has increased the odds that another La Niña weather pattern will develop and further effect Argentina during the next 6 months likely reducing corn and soybean yields and adding to the difficulties of moving goods along the Parana River. German Heinzenknecht, a meteorologist at the Argentine consultancy Applied Climatology told Reuters “In the context of La Niña reappearing, the lack of rain will not correct itself. At best it could become normal in some areas. But a return to normal rainfall will not correct the flow of the river.”
Extended weather maps and models continue to call for cooler and wetter conditions to persist through the first week in September. Total precipitation through next Thursday is indicated in the map below.
The latest GFS and EURO models that run through September 4 are included below.