When will we see the harvest lows?

Corn and soybean harvest is in progress for Ohio and the Midwest. September’s many dry days along with temperatures in the 80s and above greatly aided corn harvest for producers. Those warm, dry days reduced corn moisture significantly after Sept. 15. Numerous reports indicated it had dropped five points or more in just one week. Many producers across Ohio had corn harvest well underway before soybeans had been touched. It was odd to see the number of corn fields empty while soybeans anxiously waited their turn. U.S. harvest progress for corn the last week of September reached 15% and soybean harvest stood at 10%. Both were behind five-year harvest averages. Rains across Ohio the last week of September were anywhere from one to three inches in the southern half of the state, bringing harvest progress to a standstill for almost a week. That rainfall came from the southeast, breaking typical weather patterns of moving from the west or southwest. While many may have been frustrated at the rains delaying harvest, it was a time of welcome relief. Long, warm days pushed harvest well into the nighttime hours for many Ohio producers. Numerous reports of harvesting soybeans to midnight or after were common as moisture levels dropped well below the 13% level where elevators discount for moisture.

USDA will soon release the Oct. 12 monthly supply and demand report. The October report brings a mixed bag of expectations. Many had expected USDA to reduce the U.S. corn yield but increase the U.S. soybean yield. Last month the U.S. corn yield was 174.1 bushels per acre, down from the August report. In September USDA estimated the U.S. soybean yield at 50.6 bushels per acre, well above trade expectations. Soybean prices on the Sept. 12 report day closed down 16 cents. In spite of that higher production estimate, they were unable to make new contract lows, nor were they able to start a multiple day slide into the $8 mark as some projections had suggested. Soybean demand continues to be strong and likely increasing in coming months. With ever increasing ideas of higher soybean yields, it was easy to understand some projections that “yields trump demand.”

If Ohio is like other states in the Midwest, producers could be pleasantly surprised at the strong soybean yields this year. While early harvest reports in Ohio indicate a wide range of yields, there appears to be a strong propensity to see higher yields. While the dry July certainly did a number on keeping corn yields below earlier expectations, it kept producers anxiously excited about what was just around the corner — rains in August. Those August rains were too late to benefit corn but they certainly helped push soybean yields higher than earlier expected. Double-crop soybeans thrived under those plentiful August rains. While they have not yet been harvested, don’t be surprised to see yields of 30 or 40 bushels per acre. This was indeed a great year for double-crop soybeans.

Unfortunately, wheat prices continue to be below the $4 mark across Ohio. Plentiful stocks of wheat both in the U.S. and all around the world are to blame. The Sept. 30 quarterly stocks report had U.S. wheat inventories of 2.527 billion bushels, 125 million bushels above trade expectations. In addition, U.S. wheat supplies are 20% above those of a year ago. Russia has now become a major world wheat exporter, a far cry from the 1970s when they were a major importer of wheat. U.S. wheat futures are at 10-year lows following a 15% decline since the beginning of 2016. Early projections suggest that the U.S. will plant two million less acres of wheat this coming year.

Demand for U.S. corn continues to be strong. Exports are above those of last year and will continue to climb in coming months. Corn use for ethanol continues to grow. Typically, in big production or record setting production years harvest lows can be in place when harvest reaches 50% to 60% completion. That should be achieved by mid-October.

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