A look at the August WASDE

By Doug Tenney, Leist Mercantile

A while back the seals failed in top and bottom sashes of one of our sunroom windows. Cindy tackled the project of paperwork and photos of the cloudy glass to order replacements. We picked them up and I leaned them against the wall in the garage. Rather than add the installment to my “overdue to-do list,” she chose to bring them in and managed to remove the damaged bottom sash, aware that rain was in the forecast that evening. So when I came home, I had no choice but to finish the project which was really less “paneless” than I expected. So she won that one!! Here’s to hoping your fall equipment preparation list will go as smoothly and that you have some choice in the matter.

The Aug. 11 USDA WASDE Report was viewed as neutral with numbers close to trader expectations on several fronts. USDA estimated U.S. corn production at 15.111 billion bushels, yield at 175.1 bushels per acre (bpa), down from July’s production estimate by 209 million bushels. The corn yield was reduced from the previous estimate at 175.5 bpa. U.S. soybean production was estimated at 4.205 billion bushels, down 95 million bushels from July. Yield was down 1.1 bpa from July.

While the report was viewed as neutral, the stark reality of the report not being bullish contributed fodder for the selloff in the last two hours of that USDA report day. Grains were lower that day with corn 9 cents, soybeans down 11 cents, with wheat closing lower 12 cents.

Price action was immediately higher in the minutes after the report release with corn up 11 cents on the day while soybeans were up 20 cents for the day. Both corn and soybeans made new highs for the day in those first minutes following the noon ET report release. However, prices quickly failed to stay at those daily highs as the buying momentum evaporated, returning to levels with corn and soybeans up 1-3 cents by 12:10 p.m. The higher price action was likely a result of trading by computers reading the headlines with both corn and soybean yields reduced and also less than trader estimates.

November CBOT 2023 soybeans had a huge price decline the last week of July and into the first week of August. Price declines into Aug. 8 were fueled by frequent rains in numerous areas of the Corn Belt, accented by the absence of above-normal temperatures when prices reached $13.82 1⁄4. They made a new high for 2023 on July 24 when reaching $14.35, closing that day at $14.24 1⁄2, up 22 3⁄4 cents for the day. The price decline in that two-week period was $1.53, highlighted by six down days, and four days with price declines of 20 cents or more.

China has finally returned to the U.S. for soybean buying, purchasing new crop soybeans with their second purchase on June 30, their third of the year on July 28, and multiple purchases into Aug. 10. Those soybean purchases followed the passing of several months as their first purchase for 2023 took place on Jan. 26. It’s extremely clear that the U.S. is not the first choice for China’s soybean purchases when reviewing purchase history in early August. At that time, China bought nine to 13 cargoes from Brazil, four to five cargoes from Argentina, and nine to 13 cargoes from the U.S. Pacific Northwest. Note that with the recent drought and severe decline in Argentina soybean production, they are still making sales to China. Without their drought event this year, Argentina’s numbers would have most likely exceeded the U.S. numbers on that particular day.

My apologies for pointing out winter projections during summer. The mid-August release of the Farmer’s Almanac highlights cold and snow for the state of Ohio. While both features take place in winter, it will get the attention of many when you remember the extremely light snow totals for Ohio, especially for this past winter.

Harvest preparations are reaching feverish proportions with Ohio’s Farm Science Review often a targeted week to start harvest activity for some producers. Producers are most anxious to get into the fields to see actual corn and soybean yields. If mowing my yard twice a week the entire summer into mid-August is any indication of potential yields, it is entirely possible to see record-breaking yields this fall in numerous parts of Ohio.

Thought for the day. “Don’t judge each day by the harvest you reap, but by the seeds you plant.” Robert Louis Stevenson.