Crop Progress. The crop condition index for U.S. corn was unchanged again this week at 357. There were no changes in any of the rating categories for the third week in a row. The average crop index for this week of the growing season is 359.
The list of major corn producing states with double digit ratings of poor and very poor increased from 10 back to 11 this week (% change from last week): Colorado, 11% (-3%), Illinois, 13% (+1%), Indiana, 18% (+1%); Iowa, 13% (+0%), Kansas, 17% (-1%), Michigan, 17% (-2%), Missouri, 10% (+1%), Nebraska, 14% (+2%); North Dakota, 16% (-4%), South Dakota, 28% (+2%), and Wisconsin, 10% (+0%).
Grain Use. Exports of feed grains and feed grain co-products were strong in the most recent numbers reported. Corn export sales started off the marketing year at 41 million bushels and grain sorghum 9 million bushels. The sales pace needed to reach the USDA target this marketing year is 26 million for corn and 3 million bushels for sorghum.
Ethanol exports are on track to reach 1.4 billion gallons in 2016/17. That amount is 60% more than last year and accounts for almost 10% of total ethanol production. Exports of distillers grains are running about on par with last year but 12% above average.
Outside Markets. Inflation for all items monitored by the Bureau of Labor Statistics has been on the rise the last two months, up 1.9 percent in August compared to a year ago. A major component of the rise is energy, which was up 6.4 percent. With the impact of both Hurricane Harvey and Irma, that energy component is likely to lead the way higher again when inflation numbers are reported for September.
Grain News on AgFax
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Seasonality. The seasonal price pattern for the December corn contract shows that prices tend to fall off after we know more about acres (June 30 Acreage report) and weather during the precipitation and temperature sensitive silking and tasseling stages (July).
With dry conditions impacting major corn growing areas, yield concerns have propped up prices more so than we would see in a normal year, compounded by significantly fewer corn acres this year. The corn production estimate came in slightly higher than expected in the September WASDE which may test whether we have seen the seasonal low a few weeks early.
2017 Feed Grain Marketing Plan. I am 80% sold on the 2017 corn crop and will price the remaining 20% at harvest. I am turning my attention to the December 2018 contract and am prepared to make sales against next year’s crop if we get a significant late season rally.
September 22 – Cattle on Feed
September 29 – Grain Stocks; Small Grains Summary
October 12 – Crop Production and WASDE