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Corn Outlook:
The ag circles have been buzzing this week from news that the 3-month long war with Iran may be ending. This week, the U.S. and Iran signed an initial agreement for a 60-day cease-fire, and the reopening of the Strait of Hormuz during this period. Its reopening will facilitate shipping and help ease fuel and fertilizer costs in the months ahead. However, the question is, will Iran abide by the agreement? Meanwhile, corn continues to be plagued from non-threatening growing conditions. Last week, the crop rating improved one-point to 68 percent in good-to-excellent condition but was down from the year ago rating of 72 percent. According to Ag Watch’s yield model, this equates to a national yield of 182.9 bpa versus USDA’s estimate of 183.0 bpa. Looking at exports, inspections last week were 64.4 MB and below the average of 67.4 MB that must be shipped weekly to meet USDA’s target of 3.325 BB. The bottom line in corn is that unless weather in July turns for the worse, price gains will be limited as the dollar has risen to its highest level for the year.
Bean Outlook
Rumor of a export sale to China sent soybeans higher early this week, but when a 132,000 sale to them was reported, they backed off. As mentioned in a previous comment, China may not show their cards until after the mid-term elections. If the Democrats regain the House, it could be a game changer as President Trump will lose leverage. In the meantime, weather continues to bless the crop as the rating improved one-point last week to 66 percent in good-to-excellent condition, on par with a year ago. According to Ag Watch’s yield model, the national yield is 52.0 bpa compared with USDA’s estimate of 53.0 bpa. Looking at exports, inspections last week were 19.2 MB and above the average of 15.0 MB that must be shipped weekly to meet USDA’s target of 1.510 BB. The bottom line in soybeans is the upside price potential may be limited unless China shows serious intentions.
Wheat Outlook:
Wheat has been supported this week from fund short covering. Meanwhile, harvest is chugging along at a fast pace of 25 percent compared to 9 percent a year ago and the average of 13 percent. Exports are not helping much with inspections last week of 12.2 MB. The bottom line in wheat is that global stocks are declining, which will eventually offer support.
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