This is the SFN Market Report with Brooks Schaffer of Palmetto Grain. Reach him at [email protected] or 843-540-4540.
The Pro Farmer Crop Tour got underway yesterday, Monday August 19th. The tour has traveled the same route and used the same yield estimating procedures since 1993 to make year to year comparisons useful. The tour starts with two legs. On Monday one leg starts in Ohio and eastern Indiana, and the other starts in Southeast South Dakota and Northeast Nebraska. On Tuesday, the west leg travels a route through Southeast Nebraska, and the eastern leg covers western Indiana and Eastern Illinois. Wednesday they are in Western Iowa and Western Illinois/Eastern Iowa. Thursday they cover central Iowa and Southern Minnesota. We get state totals each day at 8 pm for the states covered. On Friday, they will release their national yield estimates for corn and soybeans. The Pro Farmer analysts will heavily weight the data from the tour but also use satellite data and the forecasts for the rest of the growing season to arrive at their estimates. The tour is going to cover many of the areas that have had prime growing conditions this year and so are expected to find very good yield potential. Many of the tour participants post to twitter throughout the day so market participants will be watching those posts closely.
The areas covered on Monday are expected to be some of the only areas with production issues. Twitter was alive Monday with pictures of ears and soybean plants from the tour. There were more than a few yield estimates below last year from South Dakota and Ohio. Stand issues were cited from both sides of the tour. I will have all individual states on Friday’s report.
Corn, soybeans and cotton all got a nice boost on Monday but I am not holding my breath that the market has turned for good. A Monday bounce followed by selloff the rest of the week has been the pattern for a few weeks now. Reasons cited for the strength include friendly outside markets, export flash sales, and disappointing yields in the early stages of the ProFarmer tour. In the outside markets, stocks have recovered from the massive selloff and the dollar has resumed its downtrend. Most are expecting the Fed to announce a rate cut this week the question is how much. We have been getting regular flash sales of soybeans to China and other destinations as the US now has the cheapest beans in the world.
USDA released updated condition ratings Monday afternoon. They showed the corn crop rated at 67% good/excellent unchanged from last week and the same as what the market had expected. That compared to 58% good/excellent last year. Soybeans were also unchanged from last week at 68% good/excellent which is what the market was expecting. This compares to 59% last year.