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It has been slightly over a week since the crop report, but USDA’s yield estimate for corn at 168.8 bpa still haunts. A private crop tour has kicked off, which will either confirm USDA’s estimate or raise more doubt. In the meantime, weather is mostly benign for the maturing corn crop. After three consecutive weeks of the crop being rated in good-to-excellent condition, the ratings fell one point last week to 69 percent. Twenty-one percent of the crop is denting, which is 7 percent below the average. Export inspections were 35.0 MB with shipments to date at 1.685 BB. With only a couple of weeks remaining in the marketing year, there is a lot of ground to catch up to reach USDA’s target of 1.850 BB. The trend following funds were active last week as they reduced their long futures position 285 MB to 235 MB.
Concerns of China devaluing the yuan and the slowing of their economy are not going away anytime soon. The impact that it will have on the global economy could have exponential repercussions. Keep in mind that they are the world’s second largest economy, and are a major economic force. Meanwhile, soybean inspections last week were better than expected at 13.8 MB. Cumulative shipments are 1.815 BB, and just shy of USDA’s projection of 1.825 BB. Last week, the crop rating for soybeans stood unchanged for the third straight week at 63 percent of the crop in good-to-excellent condition. Seventy-nine percent of the crop is setting pods, which is on par with the average. Warmer temperatures are forecast for the central Midwest, but will be accompanied with showers. As it stands now, the clock on August weather being a factor is running out. In other developments, the trend following funds increased their long position last week 95 MB to 220 MB. It will be difficult for the funds to hold this position unless more positive input arises.
There is not a lot that can be said about wheat other than it is a follower of corn and soybeans. Wheat faces stiff export competition from the Black Sea region, plus price gains will be limited by strength in the dollar. Meanwhile, export inspections last week were a marketing year high at 20.5 MB, and above the average needed to reach USDA’s target of 925 MB. For it to be reached, we must ship 18.8 MB each week, which is a tall order. Spring wheat harvest is progressing rapidly at 53 percent done compared to 28 percent a week ago and 31 percent for the average. There was not much activity from the trend following funds last week, but they did increase their short position 5 MB to 235 MB.
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