By Doug Tenney, Leist Mercantile
Weather forecasts just before the middle of September suggested the Midwest would have two weeks of warm and dry weather. Certainly this will help speed Ohio’s corn and soybeans to maturity earlier than normal. Rainfall during July and August was extremely erratic south of I-70 in Ohio. Pickaway County even had some areas which failed to have a single rain event which totaled one inch or more during June, July, and August.
Fungicide use in corn and soybeans continues to ramp higher in recent years. The costs for product and its application are always a factor. The goal remains constant: keep the maturing crop as green as possible as long as possible. Research indicates 25% of the corn yield takes place after corn has reached the black layer stage. It is easy to see why the benefits of applying fungicides to corn has gained growing and rapid acceptance in recent years.
All of us continue to deal with COVID-19 and the effects on our families and lives. We have learned after months of frustration that supply chains are not getting recharged as rapidly as we had expected. It calls for adaption and the challenge of using products outside of our wheelhouse of experience. Some are suggesting Argentina is hoarding containers once they are empty of incoming supplies. Instead, of moving them on down the line for future use elsewhere, those containers were being held for their future grain exports to other countries.
Ocean freight costs continue to escalate. This year we have seen per ton ocean freight costs as well as the daily costs to charter ocean vessels for 60 days or more set multiple records. Container ship volume at ocean side ports as well as the number of containers are setting new records more than once this year on both the east and west coasts of the U.S. Look for this trend to continue as both buyers and sellers are most anxious to see U.S. supply chains return to normal.
The U.S. quarterly grain stocks report will be released by USDA on Sept. 30. The Sept. 10 monthly WASDE report had old crop ending stocks jumping higher. Old corn ending stocks increased 60 million bushels and old crop soybeans increased 15 million bushels. Higher U.S. production numbers as a result of higher yield for both new crop corn and new crop soybeans increased ending stocks as well. New corn ending stocks increased 166 million bushels to 1.408 billion bushels. New crop soybeans ending stocks increased 30 million bushels to 185 million bushels. Producers should note that the supply and demand tables also detail the estimated average farm price for each marketing year. The average farm price for new crop soybeans with 11 months to go in the marketing year, was estimated at $12.90, down 80 cents from August. The average farm price for new crop corn was estimated at $5.45, down 30 cents from August.
Grain prices since late August have been under severe downward pressure for corn, soybeans, and wheat due to Hurricane Ida hitting New Orleans. In the 2-week period following the hurricane landfall, December CBOT lost 36 cents while November CBOT dropped 37 cents. Grain prices were dropping as uncertainty was high on when grain exports would resume from the U.S. Gulf. Two weeks following Hurricane Ida hitting New Orleans broadside, 3 of 12 U.S. Gulf grain facilities had seen electricity restored.
In the weeks ahead as the U.S. corn and soybean harvest will pick up steam as momentum quickly becomes a whirlwind of activity across Ohio and the Midwest. We will finally know, following months of anticipation with many ideas of yield expectations, what corn and soybean are yielding in both Ohio and the rest of the country.
Any hint of U.S. yields getting smaller will only add fuel to the fire of uncertainty for grain prices the balance of the year.