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Grain Update: Oct. 8
Grain Supply Update: October 8, 1996
Killing Frost Begins End of Growing Season
© Geri Guidetti, 1996
The wondering and waiting is finally over. Hopes and dreams for a
delayed, first freeze in the Midwest corn belt that might compensate for
the later-than-usual spring plantings were dashed on October 3rd as the
first killing frost ended the growing season in parts of the Northern
corn belt The low temperatures lasted long enough to stop crop growth
and increase the vulnerability of late-planted crops to frost damage.
Some corn and soybeans from Wisconsin to Michigan sustained frost
damage. Corn farmers scurried to harvest immature corn now to become
silage instead of grain. Farmers with mature soybean fields welcomed
the cold front that ended growth and hastened harvest, while fields from
Illinois to Ohio were spared the freeze, according to the USDA.
Where does this harvest leave us with respect to corn and soybean
supplies? As of this week, it is still too early to tell, but here is a
run-down as of October 6. Corn condition in the 17 major corn-producing
states was 65% good to excellent. The balance was in the fair to poor
categories. Only 14% of the corn crop had been harvested, a full 10
points behind the 5-year average. Soybeans were rated 59% good to
excellent with the balance fair to poor condition. Soybeans dropping
leaves, a sign of maturity, was 75% completed, 8 points behind average.
Harvested soybean acreage was 17% complete, but still 14% behind the
average for this time of the year.
You may remember from last week’s report that the Agriculture Department
had raised its previous estimates of the sizes of the corn and soybean
stockpiles that would remain prior to this season’s harvest. The
reassessment had driven prices for these commodities down despite the
fact that supplies were at their lowest in decades. Of course growers
are aware of this bigger supply picture, and today the Wall Street
Journal reported that farmers were holding off bringing their newly
harvested beans and corn to market. "We’re not seeing much selling at
all, which is a sign farmers are not real happy about the low price
levels and may be storing crops until the price rises," said grain
analyst David Armstrong at Chicago Corp., according to the Journal. Why
sell at a low price when the real supply/demand picture justifies a
better one?
Now add China to the supply/demand equation. The word on the street is
that China has just purchased over one million TONS of soybeans in the
past few DAYS. Supplies are not only tight here, but globally, and
China will have made a wise, timely purchase. Most analysts expect to
hear confirmation of these sales from the Agriculture Department this
Thursday. Watch and listen for it. It will be interesting to hear how
such a sale is expected to impact our national stockpile. Any guesses on
whether such a thing will even be mentioned?
It is time to begin taking a close look at how the winter wheat planting
is going across the nation. This is the wheat that will start growth
now, go dormant over the winter, and yield the bulk of this nation’s and
a good part of the world’s wheat needs by early next summer. You will
remember that wheat stockpiles have been at nearly 50-year lows this
season. By September 29, one third of the winter wheat crop grown in 19
major, producing states. This figure was 13% behind the 5-year average.
By October 6, 54% had been planted, still 7% behind the average, but
certainly looking a bit brighter. Wheat growers in Nebraska were
concerned that planting delays due to wet fields will leave the young
plants with insufficient growth to make it through the winter. Another
nail-biting year in store? There is even less cushion available this
time around.
A quick look at some highlights from international weather and crop
scenes shows wet weather is hampering summer crop harvesting and winter
grain planting in Russia. Rain halted fieldwork in western Europe while
a drying trend allowed resumption of harvest in southeastern sections.
Eastern Australia received a soaking rain that benefited lagging winter
grains and new summer plantings. Wet, cold Canadian weather pushed
grain and oilseed harvests well behind schedule in some regions. Better
weather is brightening crop prospects in Southeast and Eastern Asia, in
South America and Mexico.
It will be a few weeks before the summer harvest is finished and
estimates of its adequacy are in, but higher prices reflecting the
shorter supplies and higher costs of grains and soybeans this summer
have already hit the supermarket shelf. Growing international demand
for lower global supplies will reinforce the trend. If this summer’s
harvest numbers are less than very good, expect even greater increases
throughout most of 1997…Geri Guidetti, The Ark Institute
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