So, what can we expect from Thursday's numbers? Analysts' estimates for the corn crop size range between just shy of 10 billion to over 11 billion bushels. That range is wider than normal, but that's not the biggest wildcard in Thursday's production report, says Cargill Senior Grain Merchandiser in Eddyville, Iowa, Ray Jenkins.
"For me, the X factor could be what, if any, changes are made to the harvested acres category. Some comparisons are being made to previous 'big drought' years like 1988 when the harvested acreage category fell to 86% -- right now the government is carrying the number at 90.66% -- so there is a lot of room to play around in that category should they choose to do so," Jenkins says. "I was surprised when no change was made in the September report since we had such an early start to the 2012 corn harvest."
So, has global grain demand slowed enough? Will production numbers be bigger than earlier estimates? Jenkins says with reports like Thursday's, it always a good idea not to rule anything out heading into report day.
"In a year like this where we have a lot of early harvest activity, the October crop report is usually viewed as 'confirming' what we know about the size of the corn crop," he says. "All I can tell you is that you should 'expect the unexpected' as we are learning with these confusing quarterly grain stocks reports like the one we just witnessed."
Farmers weigh in
So, what are farmers saying? It's going to be tough for yields to show any increase from past reports despite improved growing conditions for soybeans in the last month, says Agriculture.com Marketing Talk senior contributor p-oed Farmer. But, the way the markets respond may not be business as usual.
"We may see a bump in beans, but I can tell you from experience that it takes a lot of 45- to 60-bushel beans to make up for 0- to 20-bushel beans. With the drought covering such a large area this year, I just can not see the yields getting any bigger," he says. "We will see Thursday morning for sure. This market still has a job to do and it will provide a lot of pain before it is all said and done."
While others say there is plenty of potential momentum to push prices lower, that doesn't erase all potential profit, especially considering the ongoing drought and long-term crop potential that hasn't done much to bounce back from this year's poor growing season.
"Selling at these prices is still a big win. But, that doesn't mean the supply and demand situation is fixed," says Marketing Talk senior contributor jec22. "Too much corn sold with a 5 in front to slow down demand enough. And then there is the problem of no soil moisture. Then on the beans, they are shipping them out of the U.S. like the blue-light special. So I guess it still comes down to rain. Any prediction that doesn't include that in the equation is pure fantasy."
