Corn yields pushing to new record
The monthly supply and demand forecasts from the U.S. Department of Agriculture were released this week. With harvest of corn and soybeans just around the corner, the September World Agricultural Supply & Demand Report (WASDE) is always closely watched for an indication of production for both crops. Weather has been mostly favorable during the last month and expectations were set very high in the August estimates, with corn at 178.4 bushels per acre and soybeans at 51.6 bushels per acre. Ahead of the report's release, the market was expecting (and had priced in) a slight decline in corn yield to 177.8 and a slight increase for soybeans to 52 bushels per acre. While soybeans came in close to expectations at 52.8, corn yield was actually increased to 181.3 bushels per acre. Yields were already thought to be a record, but this is well above what most thought possible. Prices fell as a result, and even with lower planted area for the 2018 crop, supplies remain quite comfortable for another year.
Durum markets pushed lower, this week. Prices had been steady for several weeks, but pressure from wheat and the end of the harvest season finally took durum prices down.
The canola market fell lower, this week. There is some reason for support. China's demand is expected to be stronger, and stocks could be contracting. But there is also pressure spilling over from the soybean and palm oil markets. Canola is having trouble fighting that pull, as any support can make the canola price uncompetitive and dry up demand. Additionally, the Canadian dollar has firmed, making canola less attractive from a currency perspective. Harvest is progressing, with Saskatchewan at 38 percent completion.
Peas and lentils
Pulse harvest in Saskatchewan is progressing well, even with less than favorable weather conditions. Wet weather could be a problem for the small portion of the pea and lentil crops that have not yet been harvested. In the U.S., pea production is down 2 percent from a year ago, to 629,000 metric tons. Yield was up, but lower planted and harvested area resulted in a drop in U.S. output expectations. Lentil output was up 17 percent from a year ago, however. Good growing conditions pushed the U.S. Department of Agriculture to raise production to 399,000 metric tons, even with a 29 percent decline in planted area.
The U.S. Department of Agriculture left the barley balance sheet unchanged in the latest WASDE Report. Ending stocks for old crop held at 95 million bushels, and new crop will be roughly the same volume for carry out. Harvest activity in the U.S. is nearly complete, as 92 percent of the crop is done.