After weeks of bearish market news, there is some bullish news the market. As more and more combines begin to move, we are getting more actual yield data. Jim Bower, with Bower Trading, says yields last week began to shift, “We have seen the yield numbers come in much lower than they have the past few weeks. Some of the corn yields that have been called into our office have been in the 140 bpa to 150 bpa area.” Bower said soybean yields have also been lower, “So I am going to stick my neck out here and say I do not think this crop is the crop we saw last year. There are just too many dry pockets and too many delays.”
Two other factors that are beginning to give the market more hope are weather related. Bower says, right now, there is a serious drought developing in Australia’s wheat crop, “They need a rain bad in about 40% of their wheat country. If they do not get some rain soon, their production could drop to 17 MMT, well below what it has been over the last decade.” Australia is a major wheat supplier to China, and a short crop could benefit the U.S. and Canada.
There is also a dryness concern in Brazil, which is getting ready to plant its soybean crop. “They need to see some rain by the middle of October in order to get this crop in the ground,” said Bower. A delay could hurt the production; that would have a major market impact.
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