The harvest of grain maize and soybeans in the United States is excruciatingly slow. At the beginning of November, the midpoint was reached for corn, the United States Department of Agriculture (USDA) reports. Normally 75% has been harvested on this date. What does this mean for international market developments?
Just like their European colleagues, the Americans are also scrambling to get as many crops harvested as possible. However, in several states this is made difficult by snow and rain. Precipitation is also forecast for the next 5 days. Especially in the Corn Belt states that border the coast.
Huge delay
In the most recent Crop Progress Report, the Ministry of Agriculture calculates the progress of the maize harvest at 52%, compared to 75% on average over 5 years. The trade expected a harvest of 58%, so the figures were negative. Due to the extremely late sowing dates, several plots have not even matured yet.
Arable farmers in the states of Iowa, Minnesota, Wisconsin and North Dakota still have to harvest the most. The latter state has only 10% of the country's corn, where the average is about 60%. In Iowa, the largest corn state in the United States with 1,28 million hectares of corn, 43% has been threshed compared to an average of 72%.
Soy situation
Soybean threshing is also lagging behind the multi-year pace. About 75% are in 'the bins', compared to the average 87%. Once again, the situation is most pressing in North Dakota. About 56% has been harvested there, compared to an average of approximately 95%. With this news in mind, it is a bit difficult to understand that the CBoT in Chicago is under pressure. The wheat price was still at $1 on Friday, November 189,60, but the December contract closed on Monday, November 4 at $187,30.
Corn price colored red
The December corn contract in Chicago has been under pressure since October 31. On Wednesday, a high of $153,83 per tonne was reached for the week. The price closed at $150 on Monday and the stock market will also turn red on Tuesday morning. The corn contract in Paris (November) expired at a closing price of €155 per tonne. The January contract closed at €4 on November 163,75, but was also lower the next day.
The reason for a depressed mood is, among other things, the impending WASDE report for November. However, the market is positive about the trade negotiations between the United States and China, causing soy prices to rise slightly.
Rosy numbers
Despite a season full of extremes, the American ministry continues to paint rosy figures. An enormous acreage and yields that are higher than farmers and the trade think. People also have little confidence in the coming report. Moreover, the most recent figures have not yet filtered through to government reports. It is not expected until January that a definitive picture of the harvest can be sketched.
Another factor is that a lot of corn was sown very late. It is therefore harvested late and produces the lowest yields. This means that the 2019 harvest will get a start, although it will take time before this becomes clear. Until then, the corn price may well fall further: due to the lack of confidence and disappointing sales on the export market and ethanol production.