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Corn Outlook:
The grains have been on the upswing since the end of June, finding support from stocks that are shrinking. However, going forward they face crosscurrents from the escalation of the U.S.-Iran conflict, rising crude oil prices, the dollar that has been trending higher, and interest rates that may be on the verge of increasing. The bottom line is a rocky road lurks ahead. Meanwhile, looking at corn, the rating improved one-point last week to 68 percent of the crop in good-to-excellent condition, but it remains below the year ago rating of 74 percent. According to Ag Watch’s yield model, the national yield is 181.2 bpa versus the USDA at 183.0 bpa. Export inspections fell from the previous week to 60.6 MB and were below the average of 68.8 MB that must be shipped weekly to meet USDA’s projection of 3.325 BB. Currently, we are on track for shipments of 3.285 BB.
Bean Outlook
China has been buying small quantities of U.S. soybeans the past few weeks, which is increasing optimism that they will honor last fall’s agreement between President Trump and Xi to purchase 25 million tons by year end. There may be additional purchases, but with the midterm elections ahead, China may wait and see how it turns out before making a commitment. If the Democrats win the house, as favored according to the polymarket betting odds, President Trumps hands will be tied for the rest of his term. This would undermine the prospect of China fulfilling the agreement. Meanwhile, the crop rating rose one-point last week to 65 percent in good-to-excellent condition and is below last year’s rating of 70 percent. According to Ag Watch’s yield model, the national yield is 52.0 bpa versus the USDA at 53.0 bpa. Looking at exports, inspections fell below the previous week at 15.4 MB and were below the average of 17.5 MB that must be shipped weekly to meet USDA’s target of 1.520 BB. Currently, the pace is running slightly short of that projection.
Wheat Outlook:
Wheat has been on fire from the escalation of tensions between Ukraine and Russia that could impact exports from the Black Sea, as well as production concerns in Europe. Meanwhile, harvest is progressing without any issues and is 67 percent complete compared to 62 percent a year ago and the average of 61 percent. However, exports continue to be a sticking point with inspections last week of 13.7 MB and below the average of 13.7 MB that must be shipped weekly to meet USDA’s target of 775 MB.
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