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Corn Outlook:
July is certainly living up to its reputation for being a volatile month in the grains. In corn, price swings of 20-30 cents have become the norm rather than the exception. This trend will continue for the next few weeks as traders are fixated on weather and supply. Most of the attention is on the upper Midwest, which is forecast to see mostly hot, dry conditions through early August. However, they may see light, scattered showers this week. Meanwhile, the crop ratings have stabilized with 65 percent reported in the good-to-excellent category, unchanged from a week ago. This compares to last year’s rating of 69 percent. According to Ag Watch’s yield model, the national yield is 168.7 bpa versus 172.0 bpa a year ago. In other developments, exports have backpedaled with inspections last week at 39.3 MB. Since mid-May, the pace has fallen 48 percent. Shipments to China have fallen 42.5 percent in 4 weeks. For the next few weeks, weather will continue to be the focal point. However, weather markets have a limited shelf life.
Bean Outlook:
Soybeans are also seeing some sharp price swings by as much as 70-cents or more. This will probably continue into August until after the crop is finished setting pods. Last week, the crop rating improved one-point to 60 percent in good-to-excellent condition and compares to last year’s rating of 69 percent. However, if hot, dry conditions persist in the upper Midwest, the rating will likely decline. According to Ag Watch’s yield model, the national yield is 47.8 bpa versus 50.2 bpa a year ago. In other developments, exports remain in a drought with inspections last week a mere 5.2 MB. China is barely visible in the sales reports. Looking ahead, traders will be glued to weather for the next few weeks. Afterward, attention will focus on demand.
Wheat Outlook:
Wheat continues to be underpinned from deterioration of the spring crop. Last week, the rating slid 5-points to only 11 percent of the crop in good-to-excellent condition. Last year, the rating stood at 58 percent in the good-to-excellent category. Winter wheat harvest continues to progress and is 73 percent done, one-point below the average. Exports are mostly a non-event with inspections last week at 18.0 MB. However, they were above the average needed to reach USDA’s target of 875 MB.
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