Corn harvest is in full swing with 27% of corn being harvested in the US as of last night. This is compared with 18% last week and 16% last year. Yield reports are coming in average to good but lower than last year. However, many forget that last year set yield records in many places so a reduction in yield this year shouldn’t be extremely disappointing. FCStone released its production survey on Thursday indicating an estimated yield at 167. Informa followed with their production estimate on Friday estimating corn yield at 168.4. The USDA Supply and Demand report comes out this Friday and we will see if they change anything from their September estimate of yield at 167.5.
Below is a graph of Corn yield estimates from FCStone, Informa, and the USDA.
Although production is important, it is still only half of the story. The other half is usage and can be just as important as production. Trade is concerned that export sales are low this year. The US Dollar is relatively strong compared to the rest of the world and the Brazilian Real is extremely weak. This makes South American crops less expensive than US crops when it comes to foreign interest. This time of year we usually see a shift in demand from South America to the US for soybeans and corn but that shift is slower this year. If exports don’t pick up we could see a further building of old crop stocks.
The following are accumulated weekly exports for corn and wheat.
The USDA released their Stocks and Acreage report on September 30. The wheat stocks estimate and the 2015 wheat production estimates were both lower than trade was expecting. This spurred a slight rally in wheat and brought us to highs that haven’t been seen since early August. There is very little news involving wheat except that many areas are dry as they try to get 2016 crop in the ground. This may cause increases in costs of production if there is a lot of re-planting. Farmers are reluctant to sell old crop wheat due to low prices and very little wheat is moving through the market.