The northern harvest is late, and nobody is paying for it

The northern harvest is running late this autumn, and some of it is still losing ground. Where the combines stood in the latest weekly reports:

• US soybeans: 25% harvested against a usual 46%, a week behind. Only 8% of the crop came in last week, where around 20% normally does.
• US corn: 23% against 34, about a week behind.
• Saskatchewan canola: 45% against 85, two and a half weeks behind.
• Saskatchewan spring wheat: a third of the crop brought in during a single week, catching up fast.
• Ukrainian sunflower: almost two and a half weeks behind in mid-September, just over one now.

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The weather favours a faster pace across North America and Ukraine from here. Further south the season is on time: Brazil has planted 9% of its soybeans, right on the average, and Argentina's corn is going in more than a week early.

Cash markets are not paying for the delay

A late harvest normally holds grain back from the market, so the first bushels to arrive fetch a premium in cash and futures curves narrow to pull grain forward. None of that is happening. In Saskatchewan, cash canola trades 67 CAD/t under ICE futures, near the bottom of its historical range, with more than half the crop still in the field. At the Gulf, the soybean basis was already firm before the combines rolled and has gone sideways through the delay. And the curves still pay to store soybeans, corn and canola, as they do in any normal autumn.

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The reason is in the bins. The US went into this harvest with 53 Mt of old-crop corn in store on September 1, its largest carry-in since 2019, and Canada's canola crop is estimated at 22 Mt, within a whisker of last year's. With that much grain behind them, buyers can afford to wait a few weeks for the rest.

The harvest pressure is postponed, not cancelled

Our reading is that the delay moves the selling rather than removing it. US farmers normally take their soybean harvest from 46% to 85% over the next three weeks. Starting from 25%, even 2022's pace would only reach about 69% by the end of October, so more of the crop than usual would reach the market just as the harvest normally winds down, in front of buyers who have so far been happy to wait.

Three signals in our data will show which way this goes:

• The weekly US soybean harvest. Below 15% a week, close to a third of the crop is still out going into November, and the late selling grows with it.
• The Gulf soybean basis. If it firms while the harvest is still behind, the market has started to pay for the delay, and the bins are no longer enough to cover it.
• The Saskatchewan canola basis. Canola is normally all in by late October. If the discount then narrows, the pressure was the calendar; if it holds, it is the size of the crop.