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Corn Outlook:
The grains have a lot on their plate with the increased escalation of the conflict between the U.S-Iran, impacting shipping in the Strait of Hormuz, and the Ukraine-Russia war disrupting shipments in the Black Sea. Meanwhile, heat in Europe is taking a toll on their crop production. Expectations are they will increase their imports of corn by 3.0 million tons. This could benefit U.S. exports, but bear in mind that Brazil and Argentina are cheaper sources. Last week, our inspections were 61.0 MB and below the average of 70.1 MB that must be shipped weekly to meet USDA’s target of 3.325 BB. Currently, we are falling slightly short of their projection. Last week, the crop rating slipped one point to 67 percent in good-to-excellent condition and is 7 points below a year ago. According to Ag Watch’s yield model the national yield is 181.2 bpa versus the USDA at 183.0 bpa. For the moment, the bulls are in control.
Bean Outlook
Recent soybean sales to China have boosted confidence of them fulfilling their agreement made last fall to purchase 25 million tons. However, the bulls could be counting the chickens before they hatch for a few reasons. One is President Trump has accused China of interfering in the elections. If true, sanctions against them could be warranted. Furthermore, Trump’s agenda for the remainder of his term depends upon the outcome of the mid-term elections in November. Also, Brazil has produced a record crop and is a cheaper source. The bottom line is China may honor their agreement, but there are reasons to be skeptical. Meanwhile, export inspections last week were less than thrilling at 10.9 MB with China taking 2.4 MB. Right now, meeting USDA’s target of 1.520 BB may turn into a photo finish. Last week, the crop rating improved one point to 66 percent in good-to-excellent condition but trails last year by 2 points. According to Ag Watch’s yield model, the national yield is 52.4 bpa versus 53.0 bpa for the USDA.
Wheat Outlook:
Wheat futures have been on fire the past few weeks because of deteriorating conditions in Europe relating to heat and drought. Expectations are that export business may swing to the U.S. but, so far, it has not happened. Last week, inspections were a paltry 7.8 MB and must average 15.4 MB each week to meet USDA’s target of 775 MB. For it to be met, there is a lot of catching up to do. Meanwhile, harvest of the winter crop is chugging along at 74 percent complete compared to 72 percent a year ago and the average of 71 percent.
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