By Doug Tenney, Leist Mercantile
While I do appreciate a lot of things about our church, I must give a high rating to the “casual dress code.” After many years of coat and tie Sundays, I find this to be very fine! So last Sunday with 40-degree temperatures, when Cindy suggested I wear a nice pair of jeans, I countered with, “I’m wearing my shorts.” I did agree to a long-sleeved t-shirt. Seasons and trends do come and go, but aren’t we blessed to have options and the freedom to do what has worked best for us — at home and in the fields!
Great harvest weather for Ohio with limited rainfall the first half of October enabled soybean harvest to progress rapidly. While yield reports vary widely across the state, many in central and southern Ohio reported soybean yields of high 50s to low 70s bushels per acre. The common thread for many producers was: how were yields so high with limited summer rainfall especially in August? They will also add that the mid-week surprise rainfalls during the third week of August for parts of Ohio were extremely instrumental in producing those yields.
The USDA weekly crop conditions report for Ohio indicates soybean harvest is progressing and reached 24% with the U.S. soybean harvest at 43% as of Oct. 10. Progress reports from producers later that same week for much of central and southern Ohio detailed some had actually completed soybean harvest. Truck lines at grain facilities were often long with reports of record inbound truck counts the second week of October. Numerous parts of Ohio were experiencing heavy soybean harvest activity the first half of October contrasted with corn harvest virtually nil in some locations. One phenomenon taking place for corn detailed moisture levels disappointingly high for the second week of October with readings of 25% to 30% very common.
South America weather is now dominating grain prices, a feature likely to continue that ranking well into the end of December. Dry weather conditions in Argentina are continuing into the second growing season for producers. Argentina corn and soybean production was sharply reduced when harvested February to April 2023. The dry Argentina conditions have also moved into central and northern Brazil. However, wet conditions are taking place in southern Brazil. While those conditions in Brazil are diverse among regions, that diversity has combined into one common event, that of soybean plantings in much of Brazil halted as of mid-October due to too wet and too dry taking place at the same time.
The Oct. 12 WASDE Report (supply and demand) lowered the U.S. corn yield to 173 from the previous report in September when the corn yield was 173.8. In addition, the U.S. soybean yield was lowered to 49.6 bushels with the September yield at 50.1 bushels. Both declines were larger than expected. The USDA yield numbers were friendly, soybeans closed higher by 36 cents. Corn closed up 8 cents on that report day.
That same report lowered U.S. soybean exports 35 million bushels while increasing soybean crush 10 million bushels. Some are expecting crush to increase an additional 60 million bushels in the next nine months. Soybean oil demand is stellar, continuing to increase, with new crush plants coming on line this fall along with capacity increased at current facilities.
Further examination of the December 2023 CBOT corn chart reveals it traded between $4.67 ¾ to $4.99 ½ in a sideways pattern from Aug. 22 to Oct. 13. The first two weeks of October, it reached a daily high of $4.97 to $4.99 on 4 different days in just 7 trading sessions. Resistance at the $5 mark is strong but attacks on that mark is impressive.
Brazil’s corn exports for October could reach 9.2 million tons (362 million bushels), up almost 50% from October 2022. The Russian invasion of Ukraine in February 2022 severely changed the landscape of world corn exporters when you grasp the reality that Brazil was not exporting a single boatload of corn to China until May 2022. Brazil’s strong corn export program is a major factor in U.S. corn exports dropping multiple times in 2023 with the monthly USDA WASDE Reports.
Harvest activity will likely continue into mid-November especially if corn moisture levels are slow to reduce in the weeks that precede your reading of this column. Drying of corn in home grain facilities looks to be greater than in the past 3 to 5 years.
Thought for the day. “Before the reward there must be labor.” – Anonymous.