If you would like to receive our technical comments including price projections and cycle analysis for important tops and bottoms, click on the link at the bottom of the commentary to sign up for a 30-day free trial subscription. Follow Ag Watch Market Advisors on Facebook and Twitter for timely information not posted in our blog.
The Midwest is experiencing intense heat that is expected to stick around until late this month. While a crop is rarely made or lost in June, it becomes a different story if the pattern persists into July. Last week, the crop rating for corn fell one point to 72 percent in good-to-excellent condition and compares to 68 percent a year ago. If we follow the norm, the ratings will probably decline as the growing season progresses. According to Ag Watch’s yield model, the national yield is 178.7 bpa versus USDA’s estimate of 177.0 bpa. In other matters, exports from Ukraine will be constrained as the conflict with Russia continues. Export inspections last week were down at 47.2 MB but are still on track for reaching USDA’s target of 2.450 BB. Other than weather, the focus centers on Ukraine, and the acreage report later this month that could be a blockbuster.
Soybean planting is winding down at 88 percent complete which is par for the average. Seventy percent of the crop is rated in good-to-excellent condition and is above last year’s rating of 62 percent. However, this could be the highest rating of the season. According to Ag Watch’s yield model, the national yield is 53.4 bpa versus USDA’s estimate of 51.5 bpa. In other developments, export inspections saw an uptick to 22.2 MB last week. To reach USDA’s target of 2.170 BB, shipments must average 26.2 MB each week. Right now, the primary focus in soybeans is on weather and the acreage report at the end of the month. The obstacle facing the market is an acreage increase that is more than expected that comes on top of estimates that Brazil will boost their plantings 2.9 percent for 2022-23.
Winter wheat harvest is getting into full swing and is 10 percent done compared to the average of 12 percent. While traders are keeping tabs on developments with Ukraine, their primary focus is on the heat wave in Europe and the spring wheat area of the upper Midwest. Looking at exports, there was a slight improvement in inspections last week at 14.2 MB. However, the strength in the dollar and rising interest rates will limit price gains.
Comments and suggestions are provided for information purposes only. Information contained herein is obtained from sources believed to be reliable but not guaranteed to its accuracy or completeness. Readers using the information contained herein are responsible for their own actions. No presentations can be made that recommendations will be profitable or that they will not result in losses. This information is neither an offer to sell nor solicitation to buy of the commodity futures mentioned herein. The writer may be trading in the commodities mentioned.