Agriculturalists hit the road this week for the 2019 Pro Farmer Midwest Crop Tour.
The tour will provide a glimpse of what is out there, in terms of row crops.
Grain markets reacted bearishly to the U.S. Department of Agriculture’s (USDA) August World Agricultural Supply and Demand Estimates (WASDE) report, as officials raised their corn yield forecast. Jim McCormick, branch manager of AgMarket.Net, says the Pro Farmer Crop Tour, happening this week, will paint a better picture of this year’s crop.
“What’s interesting is they (USDA officials) normally look at fields in August. This year, they did not; they’re going into fields in September. So last week’s report was based on more satellite imagery, economic modeling. This tour is giving us our first good glimpse at what’s out there,” McCormick said.
Results from Ohio and South Dakota indicate a late crop, which will fight to mature before the first frost. Other areas such as Iowa and Nebraska are expected to be slightly delayed to reasonable for this time of year. However, all-in-all, McCormick expects a drop in overall yield.
“In general, we’re looking for this crop to shrink back when it’s all said and done. They’re (USDA officials) not going to make an adjustment on the planted acres, so what you’re going to see is harvestable acres start to decline as we go through the fall, as we start adjusting for some of this crop to not reach maturity,” McCormick said.
If harvestable acres and yield estimates come in lower than anticipated, McCormick expects grain markets to position for a situation similar to the fall of 1993.
“In ‘93, we put a high in July, bottom in September, and then had a counter-seasonal rally all the way to the January report of 1994, as the market realized the yields were not there. That’s the analog year I’m watching for, thinking we’re going to trace,” McCormick said.
Furthermore, McCormick encourages producers to sit down with a local agronomist, understand their expected crop and then put together a grain marketing plan.
“The market has broken so hard this time that you’re below the crop insurance level for revenue insurance, so there’s no reason to panic at this point in time,” McCormick said. “What producers need to do is try to get a better handle on what type of crop they have, so they can build a marketing plan. If we do get a rally, they know where they can sell it and be profitable.”