On The Money Grain Commentary 9-19-19

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Corn Outlook:

Corn continues to lag in development with only 18 percent of the crop in the mature stage compared to 39 percent for the average. However, this is not drawing much attention as above normal temperatures are forecast into early October. Harvest is just beginning, and yields will be monitored closely. Ag Watch’s yield model puts the national yield at 165.9 bpa versus USDA’s estimate of 168.2 bpa. With global stocks down for three consecutive years, one would think that there would be greater speculative interest in corn. However, exports have slipped for the past two years and institutional trader interest in the grains is at its lowest mark in four years. Looking at exports, the new marketing year is off to a slow start with inspections last week only 16.8 MB. Right now, a catalyst is needed to bring the specs back. Meanwhile, tabs should be kept on South America as Brazil is experiencing some dry conditions.

Bean Outlook:

Sentiment is turning more positive in soybeans as China continues to make purchases. Last week, inspections were 24.4 MB with China taking 12.5 MB. High level negotiations between the U.S. and China are expected to resume in early October and hopefully they will get down to serious business as both sides have taken their lumps in the trade dispute. In other matters, the soybean crop continues to lag in maturity with only 15 percent of the crop dropping leaves versus the average of 38 percent. While warmer temperatures will speed up development, Indiana, Ohio, and South Dakota are running 39 percent, 33 percent, and 42 percent below their average. Currently, Ag Watch’s yield model puts the national yield at 48.1 bpa versus USDA’s estimate of 47.9 bpa. Like corn, large trader interest in soybeans is at a four-year low. Meanwhile, an eye should be kept on Brazil as they have been dry recently.

Wheat Outlook:

Wheat has posted a decent recovery since early September even though global stocks are near record levels. One supportive factor is that wheat is below the cost of production leaving producers little incentive to plant. There is not a lot to say about exports as inspections last week were 16.8 MB and must average 18.9 MB each week to reach USDA’s target of 975 MB. Spring wheat harvest is progressing slowly at 76 percent done compared to the average of 93 percent. Like corn and soybeans, large trader interest in wheat is at a four-year low.

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