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Corn futures are attempting to recover from the hatchet job inflicted last week by the USDA when they projected planted acres this spring at 91.7 million, 2.6 million more than in 2018. This stunned the ag industry because of the record slow plantings this year. However, the USDA will release an updated report in August that will likely show acres probably closer to 87.0 million. Adding to corn’s misery is exports are down 51 percent from late April. Last week, they were a marketing year low of only 10.7 MB. In other developments, the crop rating stood unchanged last week at 56 percent in good-to-excellent condition. According to Ag Watch’s yield model, this translates to a national yield of 158.4 bpa. While the supply side is not as bad as the USDA projects, it is going to take a few weeks for market to recover.
Soybeans have come under pressure following the acreage report last week as traders doubt USDA’s estimate of 9.0 million fewer acres than a year ago. Meanwhile, the Trump Administration and President Xi of China have agreed to a truce while coming to terms in a trade agreement. However, traders are skeptical as they have been burned many times before on promising news. Exports have improved since early May rising 44 percent. Inspections last week were 26.4 MB, but the pace of shipments is still short of reaching USDA’s target of 1.7 BB. Currently, they are on track for 1.6 BB. Looking at planting, it is winding down at 92 percent complete with 54 percent of the crop rated in good-to-excellent condition, unchanged from last week. According to Ag Watch’s yield model, this equates to a national yield of 47.2 bpa.
Wheat rode the coattails of corn higher until last week when corn peaked. The issue that continues to haunt wheat is U.S. exports are struggling in the global market and continue to butt heads with cheaper values in Europe and the Black Sea Region. For instance, Egypt bought 60,000 tons this week, but it was from Romania. Meanwhile, export inspections were a marketing year high last week at 22.3 MB, they are nothing to brag about. Looking at harvest, progress is slow at 30 percent complete versus the average of 48 percent. Right now, wheat needs a story to regain the bull’s attention.
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