Harvest is in full swing across most of the U.S. According to the most recent crop progress report; corn harvest has been reported at 27% complete and bean harvest was reported at 42% complete. As harvest has progressed in both the Eastern Corn Belt and Western Corn Belt, reports are indicating that bean yields are exceeding expectations. We have a few contacts in Iowa who are estimating bean yields to be about 10% higher than last year. We expect to see the same kind of production in Nebraska this year as well. Despite excessive rainfall this spring and summer in the Eastern Corn Belt and concerns about the implications the excessive rainfalls would have on production, bean yields have not disappointed. Illinois bean yields are hanging in there and aren’t expected to be too far off the USDA estimate of 54 bpa, which is about two bushels off the state record.
Corn has provided a little different story in the Eastern Corn Belt. Corn premiums continue to work higher in the East as producers remain reluctant to sell corn. Eastern processers are paying some of the highest numbers that we’ve seen in the last couple months. What’s so ironic about this is, that this is all happening with Illinois being about 50% complete with corn harvest. Contacts in Illinois are reporting that yields are about 20%-25% less than last year. So, the lower corn prices coupled with disappointing yields are making corn a tough buy in the East. Corn premiums in the West have reluctantly firmed as producers are reluctant to sell corn and corn harvest struggles to get started, but knowing that large yields are expected. This week the USDA reported Nebraska corn harvest to be 15% complete, which is well behind the average of 24% complete. Planting delays this past spring and cooler temperatures this fall have made it challenging to get moistures to drop.
Last year was a historical year for Milo premiums. Chinese demand was strong, as they were importing milo as a substitute for corn. Milo premiums are trying to head the opposite direction of corn. Values have gravitated to levels that are a “% of corn” which is perceived to be more normal. China has implemented import requirements which could keep premiums defensive the remainder of the year. As harvest has worked north, exceptional yields continue to be reported and could also weigh on Milo values.
At CVA, we have worked hard this summer to move grain to make sure that we are in a position to handle the large crop coming at us. We have plans to ship grain throughout harvest, allowing us to turn our facilities and make more space.
Have a safe and bountiful harvest!