The Good: USDA confirmed the large corn crop with their initial surveyed estimate coming in at 188.8 bushels per acre. This is good news for U.S. farmers as the weather has been nearby ideal across the U.S. Corn Belt. Yields in Iowa are expected to hit a record of 222 bushels per acre, while Illinois yields are pegged at 221 bushels per acre. Minnesota and Indiana yields are forecast at 202 and 205 bushels per acre, respectively which rounds out the major states that are members of the 200 club. This increase in corn yields are expected to push production to a record 16.74 billion bushels. That is good news for Corn Belt farmers but bad news for prices.
The Bad: The USDA dropped HRS production by 20 million bushels to 449 million bushels in today’s report. This dropped HRS ending stocks to 207 million bushels from last month’s 219 million bushels. The bad news is that the futures market wasn’t impressed with the reduction and closed the day down by one cent per bushel to close at C$5.78 per bushel. The drop in spring wheat values today was bad news as it marks the second trading session that spring wheat failed to close above the 20 day moving average.
The Ugly: The ugly news today was not the USDA report, but the announcement of Chinese antidumping duties of 75.8 per cent on canola. There was some positive news in that the canola market didn’t close down the contract limit. November canola closed down by C$30.50 per tonne to settle at C$650.30 per tonne. The ugly news is that canola futures prices are likely to push lower in the coming days and test the March lows. China is the largest importer of Canadian canola and the loss of new crop exports will definitely hurt. Canadian farmers need to be prepared for an extended period of lower prices for canola.
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