Wednesday, October 7, 2009

Corn and soybean harvest has actually started in Northern Illinois. We have received the first bushels of the 2009 corn harvest today with the sample predictably wet at 30.9% moisture on the corn and 15.0% for soybeans.

The Corn market put in a more tempered session today after the sharp gains from Tuesday. Traders are looking forward to the USDA crop production estimate due Friday morning. The average trade guess for corn yield is 162.7 up slightly from USDA September estimate of 161.9. The ending stocks estimate of 1.675 billion bushels is pretty much reflecting thoughts that USDA will leave demand estimates unchanged this month. The current weather forecast is little changed with heavy rains forecast for much of the corn belt with cold weather to follow. The market will continue to monitor forecast for early next week with the 28 degree line currently projected to end the growing season for most all of the Western and Northern Corn Belt for Saturday through Monday night. The rumors earlier in the week of Brazilian ethanol imports still seems to be just that but seems like there could be a cargo or two at some point. Export sales report will be out tomorrow morning, corn sales are expected to be in the 28-39 million bushel range.

Soybeans were a quiet affair as well with futures gaining a couple after the $.25 gain on Tuesday. The bean market isn't nearly as concerned about the cold weather forecast for next week but export traders are getting concerned about the timing of harvest with export vessels waiting in port for the rain delayed harvest to start supplying the market. The trade guess for the Friday report is 42.9 bpa compared to 42.3 in September. The guess for ending stocks of 257 million bushels would imply that traders are looking for USDA to increase the demand estimate from a month ago. As mentioned last week, most of this demand is expected to be front end loaded with South American production currently expected to be up 25 million ton (919 mbu) from a year ago. This helps put a bit more perspective on exporters awaiting the U.S. soybean harvest, they need it now not later...

Phil