The current talk in the market is corn and soybeans. As of Monday September 21, corn harvest was 10% complete in the US compared to 5% last week and 7% last year. Corn condition was 68% good/excellent, unchanged from last week and down from 74% last year. Daily reports put corn yields at average or better in many areas with some setting record highs.
New crop sales in the panhandle are extremely low with producers indicating break evens near or above $4.00/bu. USDA stocks and acreage report will be released Wednesday September 30. Old crop carryout from 2014 is estimated at 1.732 billion bushels higher than 2013 carryout of 1.232 billion bu. We will also see an updated number of prevent plant acreage from the USDA. FSA numbers on September 1 indicated prevent plant acres of corn at 2.35 million acres. Nebraska has 127,266 prevent plant acres of corn with 7,157 acres (5% of Nebraska) in Box Butte county and 10,309 acres (8% of Nebraska) in Sheridan county.
Recent realtor surveys in Iowa show farmland values declining 11.3% from September 2014 to September 2015. Values need to decline another 20% to be in line with below $4.00 corn futures. Concerns over economics involved with the ethanol industry are building. Low corn prices benefit ethanol margins but long term predictions of depressed energy values may cause that to change. If margins become negative, corn demanded for ethanol would drop considerably.
Wheat is being pulled around by soybean and corn prices. Prices have halted their downward trend and are being spurred by dryness in wheat producing areas in Australia and Russia reducing wheat production estimates. When looking at U.S. long term weather trends, historical trends show that 5 out of 8 times we had a strong El Nino weather pattern, the following winter, spring, and summer resulted in a shift into a La Nina pattern causing drought conditions.