If you would like to receive our technical comments including price projections and cycle analysis for important tops and bottoms, click on the link at the bottom of the commentary to sign up for a 30-day free trial subscription. Follow Ag Watch Market Advisors on Facebook and Twitter for timely information not posted in our blog.
Traders were deflated when no new developments were announced in the trade meeting between the U.S. and China this week. They were disheartened further when President Trump announced a new tariff of 10 percent on $300 billion of Chinese goods effective September 1st. In other developments, the crop rating for corn improved one-point last week to 58 percent in good-to-excellent condition. According to Ag Watch’s yield model, this equates to a national yield of 164.7 bpa compared to USDA’s estimate of 166.0 bpa. The crop remains 2-3 weeks behind in development with Illinois, Indiana, Ohio, and South Dakota lagging the most. The average first frost for these states is September 15th-October 1st. In other developments, exports improved with inspections last week at 25.4 MB. However, the pace of shipments is running 470 MB short of reaching USDA’s target of 2.1 BB. The next mover in the grains will be the acreage report on August 12th.
Traders were hopeful that the meeting this week between the U.S. and China might result in a soybean purchase. However, their optimism was doused by President Trumps announcement of a new tariff on Chinese products. Meanwhile, export inspections last week were the best seen since February at 37.9 MB. China took 12.1 MB and have averaged taking 11.5 MB each week since January. Meanwhile, be aware that the impact of African Swine Fever on demand is still an unknown factor. Currently, the USDA projects exports at 1.7 MB, but the pace is running slightly short of this mark at 1.628 BB. In other developments, the crop rating stood unchanged last week at 54 percent in good-to-excellent condition. According to Ag Watch’s yield model, this translates to a national yield of 48.1 bpa versus USDA’s estimate of 48.5 bpa. Like corn, the crop is well behind in development with Illinois, Indiana, Kansas, and South Dakota most likely to suffer the most from a frost.
There is little to comment about wheat. Winter wheat harvest is winding down at 75 percent complete with most of the activity confined to the Upper Plains. Meanwhile, the rating for the spring wheat crop fell 3 points to 73 percent in good-to-excellent condition. Export inspections last week were mediocre at 14.3 MB and must average 18.4 MB each week to reach USDA’s target of 950 MB. Right now, wheat needs a story to tell and will likely follow corn until one is found.
Want the kind of intel that helps serious producers succeed? Sign up for a FREE! trial subscription to our daily newsletters.
Comments and suggestions are provided for information purposes only. Information contained herein is obtained from sources believed to be reliable but not guaranteed to its accuracy or completeness. Readers using the information contained herein are responsible for their own actions. No presentations can be made that recommendations will be profitable or that they will not result in losses. This information is neither an offer to sell nor solicitation to buy of the commodity futures mentioned herein. The writer may be trading in the commodities mentioned.