On The Money Grain Commentary 7-13-23

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Corn Outlook:

After four weeks of a drop in the ratings, the corn crop is starting to show signs of improvement. For two straight weeks, the ratings have risen and were up 4 points last week to 55 percent of the crop in good-to-excellent condition. However, this is well below last year’s rating of 64 percent. Currently, the USDA projects the corn yield at 177.5 bpa with ending stocks for 2023-24 at 2.262 BB. In the three years since 2010, when stocks exceeded 2.0 BB, the low for December corn fell in a range between 314.75-342.5. In other matters, exports are struggling with inspections last week at 13.4 MB. They must average 41.6 MB each week to reach USDA’s target of 1.650 BB. The bottom line in corn is the weather is improving, and exports are not bringing home any ribbons.

Bean Outlook

Crop conditions are improving for soybeans, but weather is still a factor going into August. Last week, the crop rating rose one-point to 51 percent in good-to-excellent condition, but that is well below last year’s rating of 62 percent. In their latest crop report, the USDA’s yield estimate for soybeans was left unchanged at 52 bpa with ending stocks for 2023-24 at 300 MB. This is 50 MB less than the June estimate but was more than expected. Meanwhile, consideration must be given to the fact that Brazil has a record crop, China’s imports have been reduced 1.0 million tons, and exports are in a decline with the USDA lowering them 20 MB for 2022-23 and 125 MB for 2023-24. Last week, inspections were 8.7 MB, and have not seen a number exceeding 10 MB since early May. Furthermore, China is largely absent with their interest being with Brazil. The bottom line in soybeans is that when weather passes as a factor, support will have to come from exports.

Wheat Outlook:

There is little news in wheat with it mostly taking its lead from corn and soybeans. Winter wheat harvest continues to lag at 46 percent complete compared to 62 percent a year ago and 59 percent for the average. The rating for the spring crop fell one-point last week to 47 percent in good-to-excellent condition and is well below last year’s rating of 70 percent. Export inspections were in a marketing year high at 15.4 MB but are off to a slow start for the season. Russia will continue to be a thorn in the side for U.S. exports as they are projected to rise 1.0 million tons.

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