IARN — Agricultural officials lowered corn and soybean yields, as well as total production. The recent action was par for the course, as Midwest farmers battled a derecho storm and flash drought.
“The trade was looking for the crop to shrink, due to the flash drought we saw, as well as damage that came through Iowa. That’s exactly what we got,” says Jim McCormick, branch manager of AgMarket.Net.
“They dropped the corn yield down to 178.5 (and) the bean yield down to 51.9. Those are within a few tenths of what the trade was looking at. Total production for beans is now 4.3 billion bushels, corn is at 14.9 (billion),” McCormick says.
Officials also tightened supplies, domestically and internationally. Global old crop corn ending stocks went from 311.3 million metric tons in August to 309.2 million metric tons in September. Similarly, new crop corn ending stocks fell to 306.8 million metric tons from 317.5 million metric tons. McCormick says, “This could get interesting.”
“China has dealt with three typhoons in their corn region in the last two weeks. If China has a shortage of corn production, we may be the recipient of extra bushels being bought, with the world carryout tightening. I think that’s helping corn a bit.”
“Friday’s report serves as a benchmark for what to look for,” shares McCormick. He remains optimistic in his outlook.
“The big report for the corn market could be the Quarterly Grain Stocks report at the end of the month,” McCormick says. “Last year, (the) government lost about 300 million bushels on that report. If they lose 300 to 400 million bushels on this report, all of a sudden that 2.5 billion bushels carryout is getting closer to 2 billion bushels, which should be positive price wise.”
Story courtesy of the Iowa Agribusiness Radio Network.
Photo courtesy of the U.S. Department of Agriculture (USDA)