By Doug Tenney, Leist Mercantile
USDA estimated the U.S. corn yield at 168.2 bushels and the U.S. soybean yield at 47.9 bushels. Both were lowered but less than expected. Shortly after the noon report release corn was down 3 cents, soybeans up 18 cents, while wheat was up 1 cent. Minutes before the report corn was down one cent, soybeans up 15 cents, and wheat up one cent. Enthusiasm over a potential thaw in U.S./China trade talks had soybeans higher at the 9:30 a.m. grains restart.
Trader estimates for today’s report had corn and soybean yields dropping slightly compared to August. The average trade estimate for the U.S. corn yield is 167.2 bushels compared to 169.5 bushels last month. Meanwhile, the trade estimate for the U.S. soybean yield is 47.2 bushels with the August yield at 48.5 bushels. Any changes in corn or soybean acres will also be scrutinized.
USDA personnel have been in fields the last two weeks doing surveys for ear weights and pod counts. Those yields will be even more difficult to measure due to the immaturity of both corn and soybeans. Corn and soybeans are roughly two weeks behind in their maturity. This spring was the wettest spring in 125 years. Corn planting progress was the slowest in history.
U.S./China trade talks have again made the news. They are scheduled to meet again at the minister level early October with preliminary discussions to take place this month. There are indications the Chinese economy has been slowing, hurt by the prolonged tariffs in place since last June. President Trump has offered to delay tariffs scheduled to take place Oct. 1.. He has suggested a reprieve of two weeks. China’s communication ministry indicates Chinese companies are once again inquiring for U.S. pork and soybean prices.
Weather continues to be a huge concern, especially in the northern half of the U.S. Corn Belt. Frost worries appear to be non-existent into the last few days of September. But, the reality is millions of corn and soybean acres needing to avoid frost into mid-October and later. The concern will be prevalent for another 30 to 40 days. Frost and freeze will be headlines to monitor. Extended September forecasts for Canada indicated cooler than normal temperatures. It is noteworthy those same forecasts are not yet seen in the U.S.
September soybean planting progress in Brazil continues to be slow and behind normal. Dry conditions are the reason. It is expected to be dry for at least another two weeks. It is a concern but not yet a huge price mover. This year they are expected to increase soybean acres 3% to 5%. Longer term the slow soybean planting progress has a major impact for Brazil’s Safrinha or second crop corn. This corn is what they depend upon for export with the first crop of corn being used domestically.
China’s African Swine Fever continues to be rampant with signs of little progress slowing its advance. Pork supplies are tight but they continue to import pork from all around the globe. Some headlines talk of vaccine developments showing promise. The harsh reality is as of today there is no vaccine proving effective. It is a rapidly mutating disease which has spread into other Asian countries.
How we close today is most important following the noon numbers. A bearish report and a higher close this afternoon would be huge in putting in seasonal bottoms, which often occur near the September WASDE reports.