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The clock has run out for weather being a factor in corn which means demand must take the lead if a price recovery is to develop. While the dollar has fallen nearly 9.0 percent since peaking in March making values more attractive to users, stocks are plentiful. In other developments, the crop’s yield potential looks strong. Last week, the rating improved 3 points to 72 percent in good-to-excellent condition and compares to a rating of 58 percent a year ago. According to Ag Watch’s yield model, the national yield is 177.4 bpa compared to USDA’s estimate of 178.5 bpa. Meanwhile, the export pace has declined since May with inspections last week unspectacular at 31.3 MB. Currently, shipments are on track for 1.650 BB versus USDA’s projection of 1.775 BB. Long story short, the focus in corn is shifting from weather back to demand and supply.
For the past couple of weeks, soybeans have been underpinned by steady export sales to China. A 1.94-million-ton sale was announced Thursday. Meanwhile, weather is currently nonthreatening. While August is the critical month for pod setting, the crop is entering the month under healthy conditions. Last week, the rating improved 3 points to 72 percent of the crop in good-to-excellent condition and compares to last year’s rating of 54 percent. According to Ag Watch’s yield model, the national yield is 51.1 bpa compared to USDA’s estimate of 49.8 MB. If realized, ending stocks could rise to 532 MB versus USDA’s current projection of 425 MB. While exports to China have not faltered, even though tensions have risen, their interest has been mostly for new crop. Last week, export inspections were mostly mundane at 17.3 MB. Shipments are projected at 1.650 BB but are on track for 1.513 BB. With weather nonthreatening into early August and resurgence of the coronavirus in many states, the market faces a headwind.
There is little fresh news in wheat to stimulate prices. Harvest is winding down at 81 percent complete, just below the average of 82 percent. The spring wheat crop has improved with 70 percent reported in good-to-excellent condition up 2 points from the previous week. Export inspections were 19.9 MB with shipments on track to reach USDA’s target of 950 MB. Prices came under pressure this week from needed rainfall in Russia, and expectations for their plantings to increase 5 percent over a year ago. Partially offsetting this is lower production in the EU.
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