October 27, 2009

The US corn and soy harvests continue to plod along, with minimal progress made as of Sunday (October 25) after another week of soggy Midwest weather.

 

The glacial pace of the harvest is hardly news at this point, but Monday's weekly Crop Progress report from the US Department of Agriculture still showed harvest at the low end of expectations.

 

"It's slow and getting slower," said Joel Karlin, analyst for Western Milling.

 

But he added that the market is focused on other factors, including outside markets and weather forecasts that could point to better progress in the next couple of weeks.

 

The USDA said that 44 percent of the soy crop was harvested as of Sunday, up from 30 percent last week but still far behind the five-year average of 80 percent. Trade expectations ranged from 40 percent to 51 percent.

 

Key states remain far behind schedule. Illinois' crop was only 33 percent harvested, compared to the average of 86 percent, and Iowa was 47 percent harvested, compared to the average of 91 percent.

 

The soy harvest progress, while slow, was better than that of corn. Some analysts have speculated that farmers would leave their corn out in the field and harvest the soy first.

 

"There's more concern about the impact of the cold wet weather on the soy than there is on corn, particularly shattering, and fungal disease," Karlin said.

 

He added, however, that there could be better progress on corn this week, due to prices and the fact that a lot of soy are still very wet.

 

Benson Quinn Commodities analyst Kim Rugel, noting that Ohio's harvest jumped from 34 percent to 75 percent in a week, said the report "shows that once a window opens - harvest will commence and finish quickly."

 

The portion of the crop rated good-to-excellent was 65 percent, the same as the prior week.

 

The USDA said that 20 percent of the corn crop was harvested, up only 3 percentage points from last week's total of 17 percent. Last year's crop, which was considered late, was 37 percent harvested at the same point in the season, and the five-year average is 58 percent.

 

The harvest progress was at the low end of expectations, as analysts were expecting progress between 20 percent and 25 percent.

 

As with the soy, key states remain way behind schedule. The crop in Illinois was only 14 percent harvested, compared to the average of 77 percent. Iowa's crop was 12 percent harvested, compared to the average of 49 percent.

 

Benson Quinn Commodities analyst Jon Michalscheck said in a report that the data indicates there is still nearly 10.4 billion bushels of corn yet to be fed into the pipeline or put in storage. He expects the pace to pick up this week, but not more than 10 percentage points.

 

"It looks as if this will be one of those years where harvest progresses into December and possibly into next spring for some areas," Michalscheck said.

 

The slow harvest has been credited with helping boost Chicago Board of Trade corn prices lately, as it has made near-term supplies tight. But Karlin said the soggy weather delaying the harvest is mostly a nuisance that ultimately won't affect quality or quantity.

 

Although more rain is in the forecast for the second half of this week, Karlin said colder weather that could be on the way would help farmers by firming up the ground and allowing them to get their equipment into the fields.

 

Ten percent of the US crop was not yet mature. On average, 99 percent of the crop is mature at this late stage of the season.

 

The USDA also said 69 percent of the crop was rated good-to-excellent, down one percentage point from the prior week.

 

The USDA said that 76 percent of the winter wheat crop was planted, up from 69 percent the prior week and down from the five-year average of 85 percent. The report was in line with analyst expectations.

 

The USDA said 62 percent of the crop was rated good-to-excellent, in the first condition ratings of the season. Last year, 65 percent of the crop was rated good-to-excellent at the same point in the season.

 

Karlin said the main question for wheat is "how much soft red soft red plantings won't get done in the delta, and southern Midwest areas because of the calendar?"

 

Another analyst said some farmers are frustrated because their inability to harvest their soy is preventing them from planting wheat.