Saying that recent harvest conditions have been less than ideal would be an understatement. In fact, early winter weather has had a negative effect on crops all over the U.S. These effects have made harvesting the crops that much tougher, and many crops are still in the ground, far behind schedule.
According to a recent report from agriculture.com, the soybean harvest is nearing completion while corn continues to lag. The article cited the recent USDA report as stating that farmers are finishing up on soybean crops, but the corn crop remains well behind the typical pace.
Soybeans, which typically have some 5 percent left to cut at this time of year, have about 9 percent remaining to be harvested, according to the report. States in the northern part of the country are further behind, with Wisconsin and Michigan both having some 76 to 77 percent already cut with the balance remaining.
The USDA put the current corn harvest at 76 percent, far below the five-year average of 92 percent at this time of year. Northern states have again fallen behind the pace, with Michigan and Wisconsin having harvested some 39 to 44 percent of their corn crops. North Dakota, according to the article, is further behind. This state has only harvested some 23 percent of its corn crop to date. The 23 percent figure is a far cry from the state’s average of 85 percent at this time of year.
The December corn futures market has been unable to maintain trade above the $4.00 per bushel level for some time now. The market last traded above the $4.00 per bushel level last month. After approaching the $4.05 area, the market quickly sold off, however, and recently hit a low near $3.65 per bushel. The market continues to test recent lows. Technical support comes in just above $3.50 and the 50 percent retracement resistance level is around $3.77. Recent inversion in next year’s contracts should also be noted.
Soybeans for January delivery, on the other hand, have been busy in recent trade. The market recently traded as high as $9.50 per bushel before seeing significant declines that have taken prices down to about $8.90 per bushel. The bean market has twice now, back in June and then October, tried to take out $9.50 on the upside, but has failed. Even if soybeans take out $9.50 on the upside, they may have an extremely challenging level of upside resistance to contend with around $10.00 per bushel.
Although the recent weather and harvest difficulties have held up corn harvesting, prices have not yet been able to put together a sustainable upside rally. That could potentially change, however, if the crop remains well behind schedule or if the deficit increases in the coming weeks.
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