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The corn crop is deteriorating like the drip, drip, drip of a leaky faucet. Last week, the rating fell one point to 61 percent of the crop in good-to-excellent condition, and compares to the 10-year average of 63 percent. Keep in mind that the ratings typically decline from June into September. According to Ag Watch’s yield model, the national yield is 161.5 bpa versus USDA’s estimate of 170.7 bpa. On August 10th, the crop report will show results from a field survey that could offer some fireworks if past history serves as an indicator. Export inspections were routine at 38.9 MB with the pace of shipments on track to achieve USDA’s target of 2.225 BB. Looking at the funds, they were long 230 MB as of last week, but that has likely been reduced dramatically because of this week’s decline. Going forward, weather will be a diminishing factor for corn.
For the past few weeks, soybeans have been kicked around like a worn out punching bag on the whims of weather. However, the forecast through mid-August has turned non-threatening as it shows below normal temperatures and normal to above normal moisture which should stabilize the crop. Last week, the rating rose two points to 59 percent of the crop in good-to-excellent condition. This is down from the 10-year average of 61 percent. According to Ag Watch’s yield model, the national yield is 48.6 bpa compared to USDA’s estimate of 48.0 bpa. Weekly export inspections at 17.4 MB were just barely above the average needed to reach USDA’s target of 2.1 BB. Looking at the funds, they were busy last week trimming the shorts 60 MB putting them in a flat position. However, they have likely re-entered those positions based upon this week’s sell-off.
The rating for spring wheat keeps slipping as it fell two points last week to a record low of 31 percent of the crop in good-to-excellent condition. However, the decline has done little to bolster winter wheat as it cannot seem to muster an offense. This is largely because of export business going to our competitors. Inspections improved to 21.2 MB last week, but were still below the average needed to reach USDA’s projection of 975 MB. Meanwhile, the funds became more aggressive as they added 45 MB to their shorts increasing them to 155 MB. With world supply currently at a record level, a catalyst is lacking that whets the bulls interest. As we move closer to planting, that could change if prices remain at depressed levels.
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