Due to the harvest delays, the month of October was bullish for corn values as corn closed 22 cents higher.

Harvest is just beginning in the majority of the Corn Belt as extremely wet conditions have kept corn combines in the sheds. There is a huge crop of corn sitting out in fields, but the market is becoming concerned about disease and quality issues.

Select producers have repeatedly expressed concerns that due to the wet corn and extremely wet fields, they plan on leaving the corn unharvested through the winter month and will risk potential yield losses to gain natural dry down of corn. The market will have a unique job this fall and winter.

Much of the crop will get harvested this fall, but it promises to be labor intensive. How quickly will producers sell their crop after it is harvested remains to be seen, but the market will likely have to pry it out of farmers hands with stronger basis levels throughout the winter.

There is a huge demand base for corn, which is currently estimated at 13.03 billion bushels. It’s the largest on record. With the huge demand base and corn either unharvested or in farm storage, the corn market will need to bid for acres this spring to rebuild the ending stocks at a more comfortable level.

In November, weakness in prices will be used as a buying opportunity for end users.

SOYBEANS

Due to harvest delays, the month of October was bullish for soybean values as soybeans closed 48 cents higher. Harvest is underway in the majority of the soybean belt, but extremely wet conditions have kept combines in the sheds. There is a record crop of soybeans sitting out in the fields, but the market is becoming concerned about disease and quality issues. Good-to-excellent yields have been recorded this year, however final yields could still come in below expectations if adverse weather inhibits harvesting even further.

Demand for U.S. soybeans is forecast to be a record. The huge demand base for soybeans, estimated at

3.169 bb, comes in the form of strong export demand and increased consumption of oil for soy biodiesel usage.

Ending stocks are forecast to remain very tight at 230 million bushels. This is only 25 mb larger than last year at this time, despite a record large soybean production.

Demand is outpacing last year’s record export pace, indicating this year’s export profile is front-end loaded. The market will be anticipating a record soybean crop in South America and updates on this year’s production from South America will be a major driving force for prices throughout the winter. Weather during the South American growing season will be closely watched. Like corn, soybeans should bid up for acres this spring.

WHEAT

Led by corn and soybean harvest delays, along with slow winter wheat seedings, Chicago wheat managed to close 36 3/4 cents higher in the month of October. While harvest and subsequent planting delays are a positive driving force for prices, the main fundamental driving force for wheat prices will continue to be the growing supply of world wheat stocks. World wheat stocks have risen to 186 million metric tons from 166 mmts only two years ago.

Foreign countries continue to be strong buyers of wheat as wheat is consumed for food. However, U.S. wheat now has to compete with other countries to export its supplies. U.S. wheat exports are forecasted to be 115 mb below last year due to the increased foreign demand.

While the winter wheat seedings in the Plains States are slow, the good-to-excellent ratings are over 65 percent on the crop that has been seeded. Ample moisture across these states has given the winter wheat crop a great start to the growing season.

The fundamental outlook is for lower prices during November, unless the U.S. dollar plunges to new lows, which will force speculative buyers to the market.

Corn analysis

Corn closed the week $.31 3/4 lower. A combination of a rally in the U.S. dollar and improved weather forecasts, pressured corn last week. The U.S. dollar reached new lows, but managed to recover to close above the downtrend line. Since the majority of the trade is long commodities and short the dollar, the higher dollar pressured commodities.

The U.S. corn harvest remains dreadfully slow. The USDA estimated U.S. corn harvest is now 20 percent complete versus 17 percent last week, 37 percent last year and 58 percent average. The states of Iowa (12 percent) Illinois (14 percent), Minnesota (6 percent), Indiana (21 percent) and Nebraska (15 percent) are the largest corn producing states and are all well behind the normal pace.

With so little corn harvested, the trade has to believe that if farmers can harvest this crop, significant harvest pressure will eventually hit the market.

Soybean analysis

Soybeans closed the week $.28 lower. A combination of a rally in the U.S. dollar and improved weather forecasts, pressured corn last week. The U.S. dollar reached new lows, but managed to recover to close above the downtrend line.

Since the majority of the trade is long commodities and short the dollar, the higher dollar pressured commodities. While soybean harvest has picked up, it still remains very slow compared to the average.

The USDA reported U.S. soybean harvest is now 44 percent complete versus 30 percent last week, 75 percent last year and 80 percent average.