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Corn Outlook:
Fireworks were on display in the grains when traders returned from the July 4th holiday with prices rising double digits from the forecast for hot, dry conditions through mid-month. However, it is not uncommon to see a rally following the holiday. For corn, the crop rating last week stood unchanged at 67 percent and remains below the year ago rating of 74 percent. According to Ag Watch’s yield model, the national yield is 181.2 bpa compared to the USDA at 183.0 bpa. Looking at exports, they have been strong for the season but show signs of slipping. Last week, inspections were 64.6 MB, and below the average of 68.2 MB that must be shipped weekly to meet USDA’s target of 3.326 BB. Since mid-April, the pace has fallen 10 percent. The bottom line is the upside may be limited if exports continue to slip, or weather fails to become a greater factor.
Bean Outlook
Soybeans rallied early this week from growing confidence that China will purchase a large quantity of U.S. soybeans. An announcement was made of them purchasing 608,000 tons, or 22.3 MB, but it failed to drive the market higher. Be aware that China’s strategy may be to make a few token purchases, but wait until the mid-term elections before making a substantial commitment. Currently, the polymarket betting odds are 84 percent that the Democrats will win the House, up 3 points from a couple of weeks ago. For the Senate, the odds are 53 percent that the Republicans will hold on, but that is down 4 points during the same period. The bottom line is that if the Democrats win the House, President Trump’s agenda will be significantly weakened. However, if they take the Senate as well, the game changes as he could be ousted. You can bet China is aware of this. In other matters, the crop rating slipped one-point last week to 64 percent in good-to-excellent condition and is down 2 points from a year ago. According to Ag Watch’s yield model, the national yield is 52.5 bpa versus the USDA at 53.0 bpa. Looking at exports, inspections showed improvement last week at 19.4 MB.
Wheat Outlook:
Wheat rallied this week from the surge in corn and soybeans, as well as hot, dry conditions reported in Europe. Harvest continues to progress at a fast pace and is 59 percent complete compared to 51 percent a year ago and the average of 51 percent. Meanwhile, export inspections were pathetic last week, a marketing year low of 4.9 MB. We are early in the marketing year, and there is time for them to bounce back, but are currently the highest price source on the planet.
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