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A fire was lit in the corn market last week with the Pro Farmer crop tour yield estimate of 168.1 bpa which was considerably less than USDA’s current forecast of 175.4 bpa. The bullish enthusiasm cooled this week as their findings have been factored in. However, concerns of supply may persist until the crop report on September 12th. Meanwhile, the rating for corn fell one-point this week to 54 percent of the crop in good-to-excellent condition, which is well below the 10-year average of 61 percent. According to Ag Watch’s yield model, the national yield is 169.7 bpa. Once the crop report is released and harvest begins, the focus will switch to demand. Demand will be a key factor as Brazil’s safrinha corn production is expected to rise 8.2 percent with exports a record 44.5 million tons. Looking at U.S. inspections last week, they were nominal at 27.1 MB.
The Pro Farmer crop tour estimate for soybeans at 51.7 bpa barely budged the needle as it was only slightly below USDA’s current estimate of 51.9 bpa. Last week, the crop rating remained unchanged at 57 percent in good-to-excellent condition but is below the 10-year average of 60 percent. According to Ag Watch’s yield model, the national yield is 51.9 bpa. Meanwhile, Brazil is going to be a thorn in the side for the U.S. as their production is expected to rise 21 percent to 150.3 million tons with exports up 22 percent to 92.0 million. While Brazil’s Real has risen recently against the dollar, it is still cheap compared to the greenback. Looking at exports, they were disappointing last week at 16.0 MB.
Wheat got a boost early this week as Ukraine launched a counter-offensive against Russia to recapture southern parts of the region. This raised fears that the agreement with them to allow exports of grain from Ukrainian ports could fall apart. However, dollar strength turned the market lower later in the week. Currently, it is at a 20-year high. In other developments, spring wheat harvest is lagging at 57 percent complete compared to the average of 71 percent. Export inspections last week were 19.1 MB and above the average of 16.4 MB needed to reach USDA’s target of 825 MB. Meanwhile, there has been an increase in China’s interest recently.
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