Here are some interesting charts I came across courtesy of my friends at Freese-Notis. The first graph shows the highest corn yield years since 1980..and the four most recent years on the chart, all on the right, were El Nino years.
This next chart also shows the corn harvest averages for El Nino years, La Nina years and neutral years:
This data is consistent with what I have been saying since December; El Nino years typically result in bumper crops . The big impact on our industry is when will the El Nino set in and will it mean a wet corn crop?
Speaking of the crop, here are the latest numbers on the plant:
Things are still very, very slow in the upper Midwest and Ohio is also lagging behind. The Minnesota numbers are entering a concerning area, as the harvest there is almost assuredly being pushed into very late October and November which also increase the liklihood that the crop will be wet. Minnesota’s supply picture is not good, one of the most challenged in the region now with the loss of the Cochin pipeline. Some expected rail projects are also on shaky footing right now, too. That will send trucks south into Iowa and create problems along the MAPCO and ONEOK lines, which will spread into Chicago, etc.
This is the scenario we saw a year ago. We saw a large corn harvest last year, primarily because there was a record number of acres planted for corn. I remain bullish for the 4th Quarter. I can also see a scenario where even if we don’t have a strong winter (which is typically the case for an El Nino), we could still see wet barrell premium price spikes because retailers are in buying hand to mouth and spot gallons as they had to go heavy on their contracted volumes in November and December.