On The Money Grain Commentary 7-25-19

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Corn Outlook:

Two questions are on traders’ minds. What will USDA’s acreage resurvey show in August, and will there be an early frost? Those questions will be answered in due time. Right now, the long-range forecasts lean to normal temperatures in September and October. However, the corn crop is 2-3 weeks behind in development while the first frost dates in the upper Midwest are September 15th-October 1st. This suggests that crossing the finish line to maturity will be a challenge. Meanwhile, the crop rating fell one-point last week to 57 percent in good-to-excellent condition. According to Ag Watch’s yield model, this translates to a national yield of 163.0 bpa versus USDA’s estimate of 166.0 bpa. Looking at export inspections, they were uninspiring at 17.2 MB. Currently, we are on track to ship 1.840 BB compared to USDA’s projection of 2.1 BB.

Bean Outlook:

The lateness of development of the soybean crop is a concern, and possibly more so than corn as only 40 percent of the crop is in the bloom stage compared to the average of 66 percent. The days are becoming shorter which will slow development further. Meanwhile, the crop rating stood unchanged last week at 54 percent in good-to-excellent condition. According to Ag Watch’s yield model, this equates to a national yield of 47.6 bpa compared to USDA’s estimate of 48.5 bpa. Looking at exports, inspections last week were meager at 20.5 MB. Right now, we are on track to ship 1.6 BB versus USDA’s target of 1.7 BB. China took 11.6 MB and have averaged 11. 4 MB since early January. Prior to the tariffs, they were taking at least 15.0 MB.

Wheat Outlook:

There is not a lot of fresh news in wheat. Export inspections last week were 15.9 MB and must average 18.3 MB each week to reach USDA’s projection of 950 MB. Although USDA is projecting an increase, the Black Sea Region remains a thorn in wheat’s side. Harvest continues to progress slowly and is 69 percent complete compared to the average of 79 percent. Seventy-six percent of the spring wheat crop is rated in good-to-excellent condition which is unchanged from a week ago.

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