Corn and Grain Sorghum Update – Dr. Jason Kelley (Wheat and Feed Grains Specialist)
Corn and grain sorghum harvest really picked up this week with good harvest conditions. The Arkansas Agriculture Statistics Service estimated that corn harvest was 25% complete by the end of last week and should be approaching 40-50% complete by now. Corn yields continue to be variable with the excess rainfall early in the season the most common reason for variable yields. Grain sorghum harvest was estimated to be 19% complete at the end of last week and should be approximately 40-50% complete by now. Yields from early harvested fields seem to be averaging in the 110-140 bushel per acre range. Sugarcane aphids continue to be problematic in fields that have not been harvested yet.
Corn and Grain Sorghum Research Verification – Kevin Lawson (Corn & GS Verification Coordinator)
All of the corn verification fields have reached black layer and continue drying down for harvest. The cool wet weather has really slowed down the dry down process. The Lee County field was harvested on August 24 at 19% moisture and yielded 181 bushels per acre adjusted to 15.5% moisture. St Francis County should be the next field to be harvested.
The Lawrence County grain sorghum verification field was harvested on August 26 at 14.2% moisture and yielded 97.7 bushels per acre adjusted to 14% moisture. Sugarcane aphids had recently infested the field, but the harvest went smoothly with no problems from the honeydew. The sugarcane infestation in the Jefferson County field really exploded this week and a recommendation to apply 1 ounce of Transform was made. A hand sample showed the field was approximately 20% moisture so a recommendation for glyphosate was also made. There is a 14 day pre harvest interval on Transform so hopefully in two weeks harvest can begin.
Southeast Arkansas Update – Wes Kirkpatrick (Desha County)
Harvest is still progressing. We are probably 65-75% complete.
Central Arkansas Update – Anthony Whittington (Jefferson County)
Harvest continues in the area with corn yield ranging from 190-230 bushels per acre and grain sorghum yields from 100-140 bushels per acre. The late planted corn has reached black layer and is drying down.
Northeast Arkansas Update – Stewart Runsick (Clay County)
Corn and grain sorghum harvest began this week. Corn yields are averaging around 200 bushels per acre. Grain sorghum yields range from 115-125 bushels per acre dry land and 135 bushels per acre plus irrigated. Later sorghum fields are still being treated for sugarcane aphid.
River Valley Update – Kevin VanPelt (Conway County)
Corn harvest is underway in the River Valley. Most fields are cutting better than expected, averaging from 200-220 bushels per acre.
Market Update – Scott Stiles (Economics Specialist)
The corn market got a bit of positive news Thursday in USDA’s weekly Export Sales report. New crop (2015/16) net sales of corn came in at 986,563 metric tons (38.8 million bushels). This was above the high end of pre-report trade guesses which were in the range of 450,000 to 650,000 metric tons. With just one week to go in the 2014/15 marketing year, a portion (28%) of these sales were roll-overs from old crop to new crop. In the August supply/demand report, USDA projected old crop exports at 1.850 billion bushels. It appears that this estimate could be about 75 million bushels too high if weekly shipments finish out the marketing year with volumes similar to the previous four weeks.
Corn, like soybeans, wheat and cotton, is experiencing a slow start to new crop export sales relative to last year. Through August 20, new crop exports are 3.3 million metric tons or 33% behind last year. This is likely a reflection of many factors which may include: little concern about 2015 U.S. production, comfortable grain supplies around the world, and a relatively strong U.S. dollar.
In grain sorghum, Japan bought 4,064 metric tons of new crop last week. That is their first new crop purchase. China cancelled 50,000 metric tons of new crop. Total new crop sales to China are still running ahead of last year by 423,255 metric tons. In the August supply/demand report, USDA projected old crop exports at 350 million bushels. It appears that this estimate could be about 25 million bushels too high assuming weekly shipments are similar to the previous four week average.
Monday’s Crop Progress report showed that the U.S. corn and sorghum crops are in good shape with 69% of the corn crop rated good-to-excellent as of August 23. That was unchanged from the previous week. The U.S. sorghum crop was rated 68% good-to-excellent, also unchanged from the prior week. Crop development for both corn and sorghum is on par with the five-year average pace.
Typically, crop condition ratings would be declining at this point in the growing season. Ratings have held steady over the past month near historical highs. This not only adds support to the USDA’s U.S. yield estimate for corn, but it also limits the ability of market prices to turn significantly higher ahead of harvest.
Through Thursday (8/27), September corn futures have traded in a 21 cent range this week between $3.54 and $3.75. The contract has managed to settle on a daily basis between $3.60 and $3.70 with $3.60 acting as near term support. Major support is at $3.46 ½ which is the life of contract low made on August 12. The December contract is trading about 10 to 12 cents higher in the $3.65 to $3.86 range, finding price support at $3.70. The life of contract low for the December contract is $3.57 ½ .
The outside markets (ie. China equity markets and monetary policy) seem to be having the most influence on crop commodity price direction this week. Once harvest starts and there is more information flowing on actual production, markets will again focus on what is considered to be true fundamentals. Thus far, early Delta and eastern Corn Belt corn yields are off from last year, in some instances 20 bushels per acre. This may provide some market support in the near term. As harvest eventually starts in the upper western Corn Belt, reports of record yields may however begin to pressure the market to new lows.
The fine tuning of yields and acres will take place for the next few months—until January. As it stands today, the USDA indicates the 2015 crop will be large enough to keep ending stocks comfortable and near 1.7 billion bushels. Global stocks are large enough that competition for export markets will be fierce. The next USDA supply/demand report will be released on September 11 (11:00 a.m. CST). As we’ve seen this year and in recent years, key USDA reports can create considerable price moves—up (in the case of the June 30 Acreage report) or down sharply (on August 12). Mark these key report dates on your calendar as they may present marketing opportunities.
Looking ahead to next year, the September 2016 contract settled Thursday at $3.93 ¼ . The December 2016 contract finished at $3.99 ½. When purely considering price, some in the trade believe that corn acreage will decline again in 2016. In my opinion, I think just the opposite will occur next year, at least in the Corn Belt. The November 2016 soybean contract settled Thursday at $8.73. Given the price relationship between December corn and November soybeans, returns may in fact favor planting corn. And, something is keeping December 2016 corn futures at or just above $4. It could be the yield uncertainty for the 2015 crop. It could be the prospect of reduced corn production in South America as growers there are expected to increase soybean acreage this fall. Whatever the reason, 2016 corn futures have offered some opportunities over the past week to start hedging at the $4 price level.
Heat units this week were well under the 30 year average. The cool temperatures are hampering dry down for corn and grain sorghum.
Twitter – Jason Kelley @AR_Feedgrains, Kevin Lawson @ar_cornverify
Cooperative Extension Service Corn Page – www.uaex.edu/corn
Cooperative Extension Service Grain Sorghum Page – www.uaex.edu/grain-sorghum
Arkansas Row Crops Blog – www.arkansascrops.com