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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
***********************************************************************Build Your Ark!  How to Prepare for Self-Reliance in Uncertain Times…
Book I: Food Self-Sufficiency      http://www.lis.ab.ca/walton/geri.html
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