On The Money Grain Commentary 8-22-19

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Corn Outlook:

It has been nearly two weeks since the crop report, but corn values are still feeling pain from the USDA raising their yield estimate to 169.5 bpa. In the meantime, the Pro Farmer Crop Tour is underway this week with results showing the crops in Illinois, Ohio and South Dakota three weeks or more behind in maturity with yields that are down 11-15 percent from 2018. Meanwhile, the rating last week fell one-point to 56 percent of the crop in good-to-excellent condition. According to Ag Watch’s yield model, this equates to a national yield of 166.0 bpa. Looking at exports, inspections last week were a meager 20.0 MB. The pace of shipments has declined since mid-July and is one of the factors weighing on prices. In addition, the impasse in trade talks between the U.S. and China, plus talk of a recession is keeping speculators on the sidelines.

Bean Outlook:

Soybeans continue to struggle but are finding some support from the crop running as much as a month behind in development. The states of Illinois, Indiana, Ohio, and South Dakota are lagging 21-37 percent behind their average in pod setting, and the crop stands the chance of being cut short even with a normal frost date. Meanwhile, results from the Pro Farmer Crop Tour shows the pod count for Illinois down 25 percent, Ohio down 39 percent, and South Dakota down 18 percent. Looking at the ratings, the rating for soybeans fell one-point last week to 53 percent of the crop in good-to-excellent condition. According to Ag Watch’s yield model, this translates to a national yield of 48.5 bpa which is on par with the USDA. In other developments, export inspections last week were 42.5 MB, their highest since February. China took 20.2 MB and have taken an average of 12.2 MB each week since January.

Wheat Outlook:

Wheat needs a story to tell but is lacking one. Winter wheat harvest is essentially done while spring wheat cutting is off to a slow start at 16 percent complete compared to the average of 49 percent. Meanwhile, no prizes are being set in exports with inspections last week at 17.9 MB. They must average 18.0 MB each week to achieve USDA’s target of 975 MB. Currently, they are on track for 939 MB. Right now, the Black Sea Region remains the cheapest source of wheat on the global market.

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