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The prospect of a trendline yield in corn fades as each day passes. Last week, the crop rating fell 2 notches to 62 percent in good-to-excellent condition and is below the 10-year average of 64 percent. The ratings typically decline from June through harvest meaning little improvement is likely at this stage of development. Ag Watch’s yield model puts the national yield at 163.1 bpa versus USDA’s estimate of 170.7 bpa. The funds were mostly inactive last week, but did reduce their long position 15 MB to 235 MB. Export inspections were disappointing at 36.8 MB, but are on track to reach USDA’s projection of 2.225 BB. The next shaker and mover in corn will be the August 10th Crop Report. It should shed light on yield prospects as it is based on a field survey. If past reports are an indicator, it is not a time to be napping!
To the surprise of many, the crop rating for soybeans slid 4 points last week to 57 percent in good-to-excellent condition and trails the 10-year average of 62 percent. Ag Watch’s yield model shows the national yield at 48.6 bpa compared to USDA’s estimate of 48.0 bpa. While the longer-range forecast for August offers relief from heat, rainfall will be limited. In the meantime, the crop may get a boost from recent showers in the Corn Belt. In other developments, export inspections were the best seen since April, but the pace is nip and tuck as to whether USDA’s projection of 2.1 BB will be reached. The funds are reeling in their shorts, as they reduced their position 60 MB leaving them with a position of 60 MB. Looking ahead, the August 10th Crop Report will likely set the record straight on the size of the soybean crop.
Winter wheat has been on a slippery slope as it has divorced itself from the drought conditions in the spring contract. Part of the problem in winter wheat has been the lack of our competitiveness in the world market. This was seen last week from inspections being a marketing year low of 16.5 MB. Although the rating for spring wheat has fallen to a record low of 33 percent of the crop in good-to-excellent condition, it has failed to offer support. Last week, the funds became more aggressive in their bearish stance as they increased their short position 30 MB to 110 MB.
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