Dec Wheat - 1 Higher
Dec Corn - Steady to 1 Higher
Nov Beans - 2 to 3 Higher
We had a request from a producer/client to translate the crop progress report good & excellent categories this week, into a yield estimate. We all know there is much more that goes into estimating crop yield, but this will give market participants something to compare, based on known quantities.
The USDA uses farmer surveys, field sample measurements and counting, measuring, etc, to estimate yield. However, there is one uniform metric we can use. We know what the crop progress numbers were last year this same week, and we have today's ratings.
We also have the September 2022 USDA yield estimates. Therefore, by comparing today's progress numbers to last years during this same week, we can see how they compare.
Today's corn good/excellent numbers are 53%, down 1 percentage point from last YEAR at this time, not week. Further, USDA employees are measuring for this September's report near this time frame. The September 2022 USDA corn yield estimate was 172.5.
Therefore we calculate the percentage difference in the G/E numbers. Last year at this time, corn G/E was 54. The difference is 1% lower this year/same week. 1 divided by 54 = 1.85% lower. 53 is 1.85% lower than 54. The September 2022 yield estimate from the USDA was 172.5.
Therefore, 172.5 X .0185 (1.85%) = 3.2 bushels lower than last year. 172.5 minus 3.2 equals 169.3 bushels per acre. Again, this estimate doesn't take any other data into consideration - genetic improvements or any other measurement or calculation.
The sum of our knowns are crop progress numbers from 2 years, last September's yield estimate, and the fact that measurements for the upcoming September report are occurring around the current days/dates.
While there probably is some correlation between crop conditions and yield, it is not 100% and probably not even 70% - who knows. This exercise only gives us some metrics to compare this year to last year at this time, and to have a vague comparison to last year's yields, for fun.
The soybean crop progress good & excellent number is 53 today. Last year for this week, it was 57. The difference is minus 4. 4 divided by 57 is .07 or 7.0% lower than last year.
The September 2022 USDA soybean yield estimate was 50.5. 50.5 times .07 equals 3.54 bushels less than last year. 50.5 - 3.5 = 47.
November Soybeans marked another Doji bar today, with the tail sticking down instead of up. Also, the net change from Friday on the close was minus 2.25 cents. Friday's and today's bars tells us there is a fierce battle going on between the bears and bulls.
For what ever reason, the bulls were not confident enough, or otherwise ready to overwhelm the bears. Perhaps they are trying to be more tricky, or commercials secured some beans from producers selling physical, and they therefore had to sell on the board? We don't know exactly.
Indecision instead of a clear trend. Here is today's soybean daily chart. I believe the fund buyers were waiting for today's crop progress numbers. Because the G/E was 5 lower than last week, I think we won't see trade below 1358, today's low.
Today's December Corn trading session opened very near last Friday's close, and closed 5.0 cents higher on the day. This is very constructive for the bulls. You will see that there is very little overlap between the green bar bodies from today and Friday.
This represents fairly steady control by the bulls, as they were anticipating lower progress numbers (actual = down 3 today). Unlike in soybeans, the corn bulls front-ran the report - they bought ahead, instead of waiting for the news release. This is confidence.
Check out today's December Corn daily chart. Support is now 482, 4.5 cents below the close.
December Wheat added 5.25 cents on the day.
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