Early Market Talk September 29, 2020

Emtwebsite

Harvest rolls along with USDA reporting corn harvest at 15% complete up 7% from a week ago and compares to the average this date of 16%. Corn rated mature 10% ahead of normal at 75%.

Soybean harvest 20% complete nationally with Iowa at 30%. Nationally 5% ahead of normal. Iowa 22% ahead of its normal pace for this date and the furthest ahead of any state. Southern states lagging.

At 0600 CZ20 and SX20 trading 2 ¼ and 3¢ lower respectively at $3.64 ½ and $9.93 ½. Vol totals on lead contracts at just 10 and 12K.

Internal yield model suggesting a national corn yield of 173.9 which would be down 4.6 bpa from the Sept USDA est of 178.5 bpa. Yield drop of that magnitude not unprecedented with 1995 seeing a 4.5 bpa drop between Sep to Oct and 2010 the largest at 6.7 bpa. Since 1975 there have been 16 years with a yield decline between Sep and Oct with an average decline of 1.7 bpa. Leaves 20 years that were unchanged or higher. StoneX customer driven yield survey Thursday.

Yesterday sent a graphic showing 4th qtr feed residual must be larger than the third qtr this year to solve USDA annual estimate of 5,600 mln bu. Going back to 1975 my data shows that has never happened. USDA set to lower 19/20 feed / res use?

A few regions in Iowa showing some disappointing soybean yield totals. Other areas as good or better than a year ago has me leaning that the state can easily hit last years average of 55 and quite likely exceed. Haven’t seen enough evidence to suggest USDA is wrong with a national average of 51.9 bpa either. Record US soybean yield 52.1 set in 2016.

Corn market bouncing off its 20-day moving average yesterday but has little else to hang its hat on. Open chart gap down to $3.45 a distinct possibility.

Couple Iowa processors continue to show a significant spot premium. Clock ticking………………..

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