US stocks are trading higher on Monday, October 7, pending the Wasde report. The US Department of Agriculture USDA not only announces its views on the extremely late soybean and maize harvest, it also publishes figures about the expected closing stock.
Reason for stock traders to take a position or change it. It December contract Maize is the only one to record a lower price. Wheat recorded the largest increase, followed by soybeans. The soy price rose the most on Friday, October 4.
Harvest in limbo
On Thursday, October 10, the USDA will publish its Wasde report for this month. There is no shortage of news to write about. Never before has the United States sown so late and harvested so late as this year. That makes the market unpredictable. What does the calendar do to the proceeds? Analysts and grain growers are concerned about the positive returns that the ministry has come up with so far. The fact that the information may turn out very differently than many people think makes the market uncertain.
Over the past 5 to 7 years, the American grain corn harvest has consistently delivered a feat. Whether it was too wet or too dry, the yield was ultimately high. How does 2019 fit into this? The northernmost states are still experiencing the wheat crop, as is Canada. Prices are rising due to quality problems.
Crops ripen late
According to the ministry, 43% of all grain maize in the country was ripening on the last day of September. Normally that is already three quarters. Of the total area, 11% has now been harvested, compared to almost a fifth of the normal area. Of the soybeans, 55% are now ripening, compared to three-quarters on average. The harvested area is approximately one third lower than average.
At the same time as the report is published, new negotiations between China and the US will also start in Washington. This news also keeps the agricultural markets busy. The trade war has now been going on for 15 months. The agricultural sector in the US is being hit hard.
More biofuel
Announced changes in policy on biofuels, announced by President Donald Trump, should give the affected farmers a boost. From 2020, a larger share of bioethanol will be blended into American fuels. This represents a volume of 60 million litres, of which maize is the main ingredient.