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The bears have dominated the corn market for the past several months, but their selling has paused for the moment. While stocks are abundant, the severe storm that blew through Iowa and portions of Nebraska and Illinois last week with hurricane force winds may have impacted 8-10 million acres. If so, USDA’s recent production estimate of 15.2 BB and ending stocks of 2.756 BB is questionable and could be the highest of the season. Meanwhile, the rating for corn fell 2 points last week to 69 percent of the crop in good-to-excellent condition. According to Ag Watch’s yield model, the national yield is 177.4 bpa versus USDA’s estimate of 181.8 bpa. Export inspections last week were 40.8 MB with cumulative shipments at 1.587 BB. With only 2 weeks, left in the marketing year, they will likely fall short of USDA’s projection of 1.795 BB.
The focus in grains continues to center on soybeans and purchases by China. Last week, export inspections at 28.8 MB were the highest since late January. China took 15.3 MB, their most since early April. As mentioned last week, China’s imports are projected to rise 3.0 million tons with Brazil’s exports increasing 1.0 million. That leaves a 2.0 million ton gap that could be partially filled by the U.S. However, China will likely use it as a bargaining chip in future negotiations. In other developments, the crop rating fell 2 points last week to 72 percent in good-to-excellent condition. According to Ag Watch’s yield model, the national yield is 51.7 bpa compared to USDA’s estimate of 53.3 bpa. Like corn, soybeans may have seen their production and stocks estimate trimmed somewhat because of the storm that ripped through the central section of the Midwest last week.
Although the U.S. dollar has fallen slightly over 10 percent since March, Russian wheat is more competitively priced and continues to get the lion’s share of Egypt’s business. In the meantime, U.S. cumulative shipments are running slightly above a year ago with inspections last week mostly mediocre at 16.9 MB. They must average 18.7 MB each week to reach USDA’s projection of 975 MB. In other developments, winter wheat harvest is essentially finished while spring harvest is 15 percent complete compared to the average of 25 percent. Look for wheat to follow the direction of corn and soybeans in the weeks ahead but, at times, will trade on its own merits.
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