Chinese demand in particular was questioned in mid-late July over high prices in government run soybean auctions. But the late crop is raising a potentially bullish sign ahead of the September-October harvest season.
Lagging Soy Development Raises Threat Of Reduced YieldsSource CME News for Tomorrow
Late developing soybean crops across portions of the central U.S. are raising
concerns about reduced yield potential and the threat of crop losses if the growing
season is cut short by an early frost.
The lagging development pace of soybeans in key growing states of Illinois,
Indiana, Minnesota and Ohio provides for a lot of elasticity in soybean yield potential,
making August weather conditions even more critical for final output.
“Slow soybean growth is attributed to late-planted crops and could lead to
reduced yields, but if weather patterns hold true through August with ample moisture, yield reductions may not be as bad,” said Charles Mansfield, extension agronomist with Purdue University.
The late plantings and cooler-than-normal summer weather resulted in smaller
soybeans plants at this point in the season compared with previous years.
“Small soybeans or late-planted soybeans that do not reach full canopy by flowering probably have lost some yield potential,” said Chad Lee, University of Kentucky agronomist, in a crop update. “Cooler temperatures also reduce the chances of soybeans reaching full canopy by flowering.”
Lee points to various scenarios that could lead to yield reductions. As of July 26, U.S. Department of Agriculture reported the percentage of soybean crops in the blooming of stage of development at 63%, compared with the fiveyear average of 76%.
“In 2008, when 60% of the crop was blooming and lagging in maturity similar to 2009, a month-by-month yield decline from July’s 41.6 bushels per acre carried into the month of November with 39.3 bushels per acre and a January annual estimate of 39.6 for a total decline of 4.8%,” according to a research note from Allendale Inc.
“By using the resulting decline in 2008, final yield could result in 2009 yield per acre of 40.55 and end stocks of 118 million bushels versus Allendale’s present outlook of 275 million bushels and USDA’s 250 million bushels,” Allendale said in the note. USDA used a trend line yield of 42.6 bushels an acre in its July 10 supply and demand report.
However, weather in August will ultimately be the key determinant of 2009 soybean yield potential. Delayed seedings had set soybeans on an extended maturity cycle and cool Midwest summer temperatures further delayed and elongated the time the crop will take to mature, analysts said.
“An extended growing season would be in the crop’s favor as well,” Mansfield said.
“A much larger percentage of planted soybeans in 2009 will be in harm’s way of a damaging frost this coming September than normal, and if the current cold temperature pattern remains in place through September, the possibility certainly exists for a frost to create devastating consequences for overall production,” said Shawn Hackett, president of Hackett Advisors, in a market note.
“In a year where old crop U.S. supplies are near record tight, the world has no buffer stock to absorb such a shortfall in U.S. production as it might have had in years past,” Hackett said.
China Plans To Continue Reserve Corn, Soybean Sales Next Wk
The Chinese government will continue its sales of corn and soybeans from reserves next week, according to an official statement Friday. The government plans to sell 2 million metric tons of corn and 500,000 tons of soybeans in major producing areas, the same as planned in the previous weekly sales, according to the statement published on China National Grain and Oils Information Center’s Web site.