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The USDA opted to bump crop-conditions higher from 53% to 54% "Good-to-Excellent" vs. 66% rated GD/EX last year.

Kevin Van Trump, Founder

October 16, 2019

3 Min Read
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The bulls were happy to finally hear the Chinese confirming that "Phase 1" of the trade deal appears to be in the works.

 

There were no details as to how or when the additional Chinese purchases would start being made, but it's nice to hear both nations seem to now be on a similar page. The not so good news is the whispers that China is looking for the U.S. to roll back some of the previous tariffs before they fully agree to the massive agricultural purchases. More not so good news is the meal basis in South America has been getting hammered, while our domestic crush number here in the U.S. was a disappointment yesterday. Most traders were expecting the NOPA crush numbers to record large, but instead, they came in well short of expectations at roughly 152.5 million bushels during September, which is a significant -15.5 million bushel drop from August and a sizeable -8.2 million bushel decline from last-September. Some bulls are making excuses saying there was a lot of plant maintenance going on in September.

 

I'm not saying there wasn't part of the reason, but I don't see that as the only explanation for the setback. The other negative impacting the market is the fact the USDA actually showed an improvement in the overall crop-condition despite the massive winter storm and wide-spread freezing temperatures late last week.

Related:Harvest considerations for frost-killed crops

 

The USDA opted to bump crop-conditions higher from 53% to 54% "Good-to-Excellent" vs. 66% rated GD/EX last year. States showing improvement were: South Dakota +5%, North Carolina +4%, Michigan +3%, Arkansas +2%, Kentucky +1%. States showing a slight decline in conditions were: North Dakota -8%, Minnesota and Wisconsin -3%, Nebraska -2%, Kansas, Ohio, and Tennessee all down -1%.

 

I'm actually surprised overall conditions bumped higher with these types of state numbers. It feels like we should have seen conditions deteriorate a bit from the previous week. The USDA reported the U.S,. soybean harvest at 26% complete vs. the 5-year average of 49%. Keep in mind, Iowa is only 17% harvested vs. 43% historically, Illinois just 27% vs. 55% historically, Minnesota just 19% vs. 62% historically, Nebraska 28% vs. 47%, North Dakota just 16% vs. 67% historically, South Dakota just 13% vs. 57% historically. In other words, there's still a ton of soybeans in the field that are late-maturing and yet to be harvested.

 

As a spec, I continue to hold conservative bullish positions in the NOV19 contract. As a producer, I've made some recent sales but now want to remain patient for the moment. I'm wanting to see how things play out in late-2019 and early-2020.

 

I believe there are going to be some better pricing opportunities so check out my free trial report for more details. 

 

https://www.vantrumpreport.com/free-trial/

 

The opinions of Kevin Van Trump are not necessarily those of Corn and Soybean Digest or Farm Progress.

The source is solely responsible for the information provided and is wholly owned by the source. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.

 

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About the Author(s)

Kevin Van Trump

Founder, Farmdirection.com

Kevin is a leading expert in Agricultural marketing and analysis, he also produces an award-winning and world-recognized daily industry Ag wire called "The Van Trump Report." With over 20 years of experience trading professionally at the CME, CBOT and KCBOT, Kevin is able to 'connect-the-dots' and simplify the complex moving parts associated with today's markets in a thought provoking yet easy to read format. With thousands of daily readers in over 40 countries, Kevin has become a sought after source for market direction, timing and macro views associated with the agricultural world. Kevin is a top featured guest on many farm radio programs and business news channels here in the United States. He also speaks internationally to hedge fund managers and industry leading agricultural executives about current market conditions and 'black swan' forecasting. Kevin is currently the acting Chairman of Farm Direction, an international organization assembled to bring the finest and most current agricultural thoughts and strategies directly to the world's top producers. The markets have dramatically changed and Kevin is trying to redefine how those in the agricultural world can better manage their risk and better understand the adversity that lies ahead. 

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