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Hardly a peep was made by traders about the June Crop Report as their focus is squarely on weather. There were some isolated showers mid-week, but the forecast for the next two weeks is for hot, dry weather in most of the Midwest which is keeping traders on pins and needles. Last week, the rating for corn fell 4 points to 72 percent in good-to-excellent condition. According to Ag Watch’s yield model, this equates to a national yield of 170.4 bpa versus 172.0 bpa a year ago. Meanwhile, USDA projects 2021-22 ending stocks of corn at 1.357 BB, down 150 MB from May. This was below the trade estimate. Global stockpiles are forecast to fall 900,000 tons to 289.4 million. Overall, the report is considered friendly.
Soybean planting is nearly done with 67 percent of the crop rated in good-to-excellent condition compared to 72 percent a year ago. According to Ag Watch’s yield model, the national yield is 49.2 bpa versus 50.2 bpa last year. With stocks extremely tight, each weather forecast will be scrutinized under a microscope. In the June Crop Report, USDA projects 2021-22 ending stocks of soybeans at 155 MB, an increase of 15 MB from last month. This was above the trade guess. Global stocks are forecast to be up 1.5 million tons to 92.6 million. While the report may be disappointing to the bulls, weather holds the trump card because stocks remain tight, and we are early in the growing season.
Wheat is being propped up from strength in corn, but gains will be limited because of the approaching harvest. In the June Crop Report, USDA projects 2021-22 ending stocks to fall 4 MB to 770 MB which was slightly below the trade guess. Meanwhile, global stockpiles are forecast to rise 1.8 million tons to 296.8 million. All wheat production is up 16 MB to 1.898 BB while winter wheat is projected to rise 1.8 million tons to 296.8 million. The report is negative for wheat, but the market will likely be supported by corn.
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