Glacier FarmMedia — The trade switched its focus from the charts to the ground this week as the Pro Farmer Crop Tour makes its way through seven states, examining corn and soybean fields from Aug. 18 to 21.
In the first two days, Ohio, South Dakota, Nebraska and Indiana mostly reported higher corn and soybean yields than last year and the three-year average. Some areas reported yields more than 10 per cent higher than the year before. The only exception was a slightly lower average soybean yield in Indiana.
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Corn is coming off its recent contract lows on the Chicago Board of Trade and soybeans remain at the same level since the United States Department of Agriculture released its supply/demand estimates last week. But Tom Lilja, an analyst for Progressive Ag in Fargo, N.D., said the crop tour is pressuring futures prices.
“We’re seeing there is very good crop potential,” Lilja said. “Certainly an above-average crop. Certainly a high-yielding crop is coming.”
The crop tour is supporting the USDA’s projections of average yields surpassing last year’s and potentially breaking records. In turn, futures prices have stayed low for corn, which is bringing in more demand from overseas.
“This morning, we saw two (export) corn sales to Colombia and Mexico. So our prices are certainly cheap enough,” Lilja said on Aug. 20. “The pace has been very good on corn and on the wheat market. The wheat market has been priced pretty cheap all year and traditionally, it’s running ahead of the average pace for sales at this time of year.”
However, U.S. soybean sales are being put in limbo by its largest buyer.
“The news there is we’re still waiting for confirmation from China to buy some of our soybeans and they are currently focusing on buying plenty of South American beans right now,” Lilja added.
He thinks corn and soybean prices will see some support in the coming weeks.
“We would look for soybeans to be fairly supported. The corn market, as well,” Lilja said. “We’re at such low price levels, it certainly looks like (both crops) will trade sideways for a while.”
