At this point in the new marketing year new crop commodity prices move primarily due to prior year ending inventories, the size of the new crop, and projections for consumption and end of new year inventory levels. On Sept. 30, 2016, USDA released the quarterly Grain Stocks report which revealed marketing year ending inventories for corn, soybeans and wheat as of Sept. 1, 2016. On Oct. 11, 2016, USDA released the Crop Progress report identifying the harvest pace for 2016/17 marketing year corn, soybeans and cotton among other commodities. Then on Oct. 12, 2016 USDA released the latest World Agricultural Supply and Demand Estimates (WASDE). Combined these reports provide an opportunity to update expectations on the size of old-crop inventories as well as new-crop supply, use and price projections.
This week’s Crop Progress report revealed U.S. corn and soybean harvests were 35 and 44 percent complete, respectively. The pace of the corn harvest is three percentage points below both last year’s and the five-year average pace. For soybeans, harvest is 12 percentage points below last year’s pace and three percentage points below the five-year average. A primary reason for the slower rate of harvest is the limited days of fieldwork available. For example, rainfall across Iowa and Minnesota over the past seven days resulted in two fewer days suitable for fieldwork compared to last year. Figure 1 shows the deviation in harvest progress across the country. The National Weather Service’s precipitation forecasts of additional wet weather in these areas over the next seven days may further delay the pace of harvest in these major production areas.
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