The grain markets sank lower again. For the week ending Aug. 23, December corn was down 14¢, November soybeans were down 24¢ and December wheat was marginally lower.
The 2019 Pro Farmer Midwest Crop Tour spanned seven states this week. Tour reports unveiled the stresses the corn and soybean crops faced following an excessively wet spring and record-slow planting pace this year. Scouts on Crop Tour sampled around 3,000 fields across the Corn Belt in seven of the nation’s most important corn and soybean states.
Here’s a recap of what scouts found in the seven states they toured (corn is measured bu. per acre and soybeans are pods per 3’ X 3’ square):
- Corn 171.17
- Soybeans 997.68
- Corn 161.46
- Soybeans 923.94
- Corn 182.83
- Soybeans 1,106.91
- Corn 170.37
- Soybeans 965.31
- Corn 172.55
- Soybeans 1,210.83
- Corn 154.35
- Soybeans 764.01
- South Dakota
- Corn 154.08
- Soybeans 832.85
“The Pro Farmer Tour found what we suspected they would find,” says Jerry Gulke, president of the Gulke Group. “I think the market, kind of looked at the results and said, ‘Well, you didn’t tell us anything new we didn’t already know.' There was no wow factor in there.”
Gulke says the other negative force for the grain markets was China. According to Reuters, China will impose an extra 5% tariff on U.S. soybeans starting Sept. 1, and an additional 10% tariff on U.S. wheat, corn and sorghum starting Dec. 15. There will also be an additional 10% tariff on U.S. beef and pork on Sept. 1.
“Then Friday afternoon, Trump came out and said he’ll address China's retaliation,” Gulke says. “Things have gotten so bad; you wonder if it could get any worse in terms of tariffs. Then all of sudden, here comes something like this. It seems like we’re in for the long haul.”
Gulke is hopeful the leadership of the two countries come to some sort of agreement.
“You would think sounder minds will take over and say, ‘You know, we're going to ruin everybody, let's get together and meet halfway,” he says. “So, I'm kind of hopeful something will turn up yet by Dec. 1.”
Pro Farmer Production Estimates
Following the conclusion of the Crop Tour, Pro Farmer released its estimates the 2019 corn and soybean crops. Pro Farmer pegs the U.S. corn crop at 13.358 billion bushels, based on an average yield of 163.3 bu. per acre. That compares to USDA’s Aug. 1 estimate of 169.5 bu. per acre.
For soybeans, the Pro Farmer production estimate is 3.497 billion bushels, with a national average yield of 46.1 bu. per acre, down from the 48.5 bu. per acre USDA estimated in August.
Gulke says, if Pro Farmer is right and the Midwest has a normal frost, the corn carryover will be cut from 2.1 billion bushels to 1.6 billion bushels. For soybeans, these estimates drop production by 175 million to 200 million bushels.
“This solves a lot of problems,” he says. “If the market believes Pro Farmer, you probably won't buy beans or corn down here again unless the government comes up with something different. We needed a good report, and kudos to Pro Farmer for coming up with something that most of us will say you're a lot more realistic than USDA.”
Find more written and audio commentary from Gulke at AgWeb.com/Gulke