Mark Welch, Texas A&M ag Extension economist, said in his early November Market Grain Outlook, that the U.S. corn crop harvest was on a normal pace, and that The International Grains Council had raised its estimate of world corn production the week prior. His report continued as follows:
Total 2016/17 production is up 8 mmt (315 million bushels) from 1,027 mmt (40.431 billion bushels) in September to 1,035 mmt (40.746 billion bushels). Noted were bigger crops in the U.S., Argentina and India. Use projections were up in an amount about half the size of the production increase.
Ethanol production for the week of Oct. 28 was 42.924 million gallons per day, five percent above same time last year and 12 percent above the five-year average. USDA’s combined projection of corn for fuel and sorghum food, seed and industrial use is just below the implied grain-use projection based on the current rate of production.
This week’s Grain Crushings and Co-Products Production report showed that in September 435 million bushels of corn and 5 million bushels of grain sorghum went to fuel production. The monthly pace to reach USDA’s combined use total of 5.395 billion bushels is 450 million bushels per month. Average monthly grain for fuel crush in 2015/16 was 445 million bushels.
Broiler chick placements continue to show numbers ahead of last year and the five-year average. For the 2016/17 corn marketing year, broiler chick placements are up two percent.
U.S. corn export sales remained on pace to reach the 2016/17 target set by USDA. For the week of Oct. 20, sales of 31 million bushels were recorded, one million above the pace needed to hit the target. Cumulative sales are at 41 percent of the marketing year total. On average, 41 percent of yearly sales are on the books by the end of October.
In a press release, the Fed noted growth in economic activity since September and strength in the labor market. While economic analysts did not expect a rate hike in November, 86 percent expect a rate hike in December.
The long-term seasonal price pattern for December corn is to set the harvest low in early October then trade mostly sideways to expiration, though it may be set a month early this year, the overall pattern is still holding at this point. I have completed sales of the 2016 corn crop with harvest wrapping up. My focus now turns to the 2017 crop. Again, I will break up sales based on seasonal patterns and dates associated with major crop reports and growing conditions.