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Corn Outlook:
There were no major fireworks in the acreage report this week as USDA’s estimate of corn acres was in line with the trade guess of 95.203 million, up 4.6 million from a year ago. This puts the focus on weather and yield prospects in the weeks ahead. Currently, the weather is non-threatening through mid-July. Longer-term, through September, above normal temperatures are forecast with normal to above normal moisture in most areas of the Midwest except for sections in the north and west. Last week, the crop rating rose 3 points to 73 percent in the good-to-excellent category and is 6 points higher than a year ago. According to Ag Watch’s yield model, this equates to a national yield of 184.5 bpa versus USDA’s estimate of 181 bpa. Looking at exports, inspections last week of 53.9 MB were slightly below the average needed to meet USDA’s target of 2.650 BB. The bottom line is the chance of a weather market developing in corn is fading which means exports will have to shoulder the load.
Bean Outlook
USDA’s estimate of planted soybean acres at 83.380 million, down 3.6 million from a year ago, seemed friendly on the surface, but it was within the range of guesses in this week’s report. Furthermore, the market may face a headwind from Brazil’s forecast a record crop of 175,000 million tons in 2025-26, and exports that are declining. Also, the weather is non-threatening through mid-July, while the long-range forecast may not pose a problem either, except for sections in the north and the west. Last week, the crop rating stood at 66 percent in good-to-excellent condition for the third consecutive week and is one-point below a year ago. According to Ag Watch’s yield model, this equates to a national yield of 50.7 bpa versus USDA’s estimate of 52.5 bpa. Looking at exports, inspections last week were 8.2 MB with China being a no show for the fourth consecutive week. The bottom line is weather has not been an issue, so far. Meanwhile, optimism has risen from a potential increase in demand for soy oil as a feedstock for biofuels, a completed trade deal being announced with Vietnam, and the U.S. and China possibly striking a trade agreement that could increase exports. However, China has invested billions in Brazil’s infrastructure for sourcing soybeans, which means the U.S. may not be as high on their list as many anticipate.
Wheat Outlook:
All wheat acres at 45.478 million acres were down slightly, but that was expected in this week’s report. Harvest is trudging along at 37 percent complete compared to 52 percent a year ago and 42 percent for the average, but the delay is offering little support. Meanwhile, export inspections were a marketing year high last week but must average 16.2 MB to meet USDA’s projection of 825 MB. The bottom line in wheat is the fundamentals are neutral, but the funds are short, which may offer support if they cover.
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