The 2018 calendar year can definitely be divided into two distinct periods for the crop markets. From the start of the year to the end of May, the crop markets were slowly building up higher prices and better-projected returns.
These shifts were based on very strong domestic and international usage for both corn and soybeans and the slight downshift in acreage for both crops. However, since the end of May, the markets have taken a beating, with futures declining 10 to 20 percent, erasing projected positive returns and bringing the outlook back to a breakeven ballgame at best.
While domestic demand remains relatively strong, ag exports have weakened with the imposition of tariffs and delays in trade agreement renegotiations. And while planted acreage did shrink and some plantings were delayed, crop ratings have been above average throughout the growing season.
The USDA’s first field-based estimates of the upcoming crops put both corn and soybeans in record territory, with the national corn yield and the national soybean production numbers at the highest levels ever seen.
Trying to break a pattern
So 2018 started out as though we might break the pattern of the past few years where production generally exceeded usage and prices languished, only to revert back to the pattern from man-made and natural causes.
The August corn yield estimates showed the strength of the corn crop across much of the traditional Corn Belt. The national average is projected at 178.4 bushels per acre. That ...