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Corn Outlook:
A massive corn harvest is just around the corner, but its size is yet to be determined. USDA’s current yield estimate is a record 188.8 bpa which might be lowered in the September crop report because of crop issues in some areas. However, even if it occurs, demand is paramount to offset the increased supply. This could be sticky because the cattle inventory is at a 70-year low with placements expected to be down 6 percent from a year ago which will impact feed usage. That means exports and ethanol consumption will have to carry the brunt of the load. So far, exports have been exceptional and are 28 percent higher than a year ago with inspections last week at 51.3 MB. Mexico is our largest customer, but whether their appetite for our corn continues could be a question. The bottom line is price gains are limited based upon supply and current demand.
Bean Outlook
Soybeans have risen the past couple of weeks, mostly from the funds covering short positions and optimism that China will eventually buy U.S. soybeans. During this period, the funds reduced their position from 580 MB to 270 MB. Meanwhile, Brazil will begin planting in a few weeks with some forecasting their acreage increasing as much as 2.9 percent and production as high as 178.2 million tons. Looking at exports, inspections last week were nominal at 14.0 MB. All eyes and hopes rest on China, but they have not received a shipment of U.S. soybeans since the first week of June. Currently, they are meeting their needs from Brazil. Be aware that China’s imports from the U.S. have been on the downswing since 2021. Normally, their interest in our soybeans commences in late September-early October when harvest begins. The bottom line is that current values cannot be sustained without China’s business.
Wheat Outlook:
There is not a lot of fresh news in wheat. The winter wheat harvest is over, and the spring harvest is 53 percent complete compared to 48 percent a year ago and 54 percent for the average. Last week was a good period for exports as inspections were a marketing year high of 34.7 MB. They must average 16.5 MB each week to meet USDA’s target of 875 MB. Right now, we are running ahead of the pace for it to be met. Meanwhile, global competition will be stiff as the production forecast for Russia and Australia has been raised recently.
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