Chicago Board of Trade Market News
Outlook
The Pro Farmer Crop Tour wrapped up with results from Iowa and Minnesota. Iowa’s corn yield potential set a new record high for the crop tour at 192.79 bu/ac, well above the 2023 tour results of 182.8 bu/ac and the 3-year average of 185.79 bu/ac. USDA’s latest estimate is 209 bu/ac, which would also be a record yield. Minnesota, the fourth largest corn producing state in the U.S. was an outlier in this year’s crop tour. The crop tour projected 164.9 bu/ac for Minnesota, down 16.44 bu/ac from last year’s crop tour and down 18.16 bu/ac from the tour’s 3-year average for Minnesota. USDA’s latest forecast for Minnesota was 185 bu/ac, the same as last year. Based on the crop tour, USDA may need to reduce the state corn yield for Minnesota once more data is collected.
Based on the data from all six states covered by the Pro Farmer Crop Tour, the tour forecasts a total U.S. corn crop of 14.979 billion bushels on a national average yield of 181.1 bu/ac. This compares to the latest USDA corn yield of 183.1 bu/ac and national corn production of 15.146 billion bushels. Corn prospects east of the Mississippi River are phenomenal according to crop tour participants. For many, the best they have ever seen. Prospects west of the Mississippi River are more variable with too much rain in northwest Iowa and southern Minnesota and some stress due to dryness and heat in the south-central Plains states.
For soybeans, the crop tour forecasts national soybean yield of 54.9 bu/ac and national soybean production of 4.74 billion bushels, 151 million bushels more than USDA’s latest estimate of 4.589 billion bushels.
And, barring some disaster, the 2024 crop is set up well to finish strong for both corn and soybeans.
Weekly export shipments were 35.2 million bushels of corn and 15.1 million bushels of soybeans. With 1.5 weeks left in the 2023/24 export marketing year, corn needs 40 million bushels in shipments to meet USDA’s projections and soybeans need 26 million more bushels to be shipped. Corn will likely exceed this amount and USDA will ultimately raise current year exports once final export shipment numbers are known. For soybeans, it is “wait and see”. The potential is still there to meet USDA’s export expectations, but it would not be surprising if the final numbers fell a few million bushels short of the current estimate.
Despite the fall of the dollar, which is logically favorable to U.S. exports, the fall in prices continues to be driven by competition from the Black Sea region. In the case of wheat, the Black Sea exporting countries dominate international sales at low prices, especially from Russia. Russian wheat export volumes seem to be increasing in the last days of August despite the demand for wheat being low as there are virtually no international tenders on the market. In addition, the potential disruptions to wheat exports that could have resulted from difficulties in rail transport in Canada seem to be disappearing after the announcement of a federal request to resume work.
For corn and soybeans, U.S. farmers continue to sell old-crop supplies to make room for harvest and to generate cash flow. This end-of-the-marketing-year selling is pushing corn and soybean futures prices to new contract lows and cash corn and soybean prices down to the price levels of the fall of 2020. The next level of support may be the March/April 2020 lows that were seen during the COVID-19 sell-off.