On The Money Grain Commentary 6-18-20

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Corn Outlook:

Corn is creeping along searching for input that either energizes the bulls or brings a new wave of selling from the bears. Currently, the funds are short a near record 1.660 BB which could trigger a rally if forced to cover. However, no threats are visible as weather looks benign through the end of the month. Meanwhile, July could be a different story when the crop is pollinating. In the meantime, seventy-one percent of the crop is rated in good-to-excellent condition, a decline of 4 percent from the previous week. According to Ag Watch’s yield model, this translates to a national yield of 177.8 bpa compared to USDA’s current estimate of 178.5 bpa. Looking at exports, inspections last week were 35.8 MB and must average 51.9 MB each week to reach USDA’s target of 1.775 BB. Later this month the planted acreage report could be a game changer.

Bean Outlook:

China has been more active in their soybean purchases the past couple of weeks, but mostly for new crop. Inspections last week were nominal at 13.8 MB and must average 29.3 MB each week to reach USDA’s projection of 1.650 BB. Some states are seeing a resurgence in Coved-19 that may raise anxiety about demand. In other developments, planting is winding down at 93 percent complete versus the average of 88 percent. Seventy-two percent of the crop is rated in good-to-excellent condition which is unchanged from the previous week. This compares to the 10-year average of 70 percent. The Dakotas and parts of Nebraska are on the dry side.

Wheat Outlook:

Wheat faces an uphill struggle from record global stocks and winter wheat harvest that is in the early stages. As of last week, 15 percent of the crop had been harvested which is par for the average. Eighty-one percent of the spring wheat crop is rated in good-to-excellent condition, down one point from the previous week. Looking at exports, inspections last week were 16.3 MB and below the average of 18.5 MB needed to reach USDA’s target of 950 MB. For now, wheat needs a production issue with one of our competitors to get in the good graces of the bulls.

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