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Corn Outlook:
The dust from last week’s shocker of the USDA increasing corn acres 5.1 million from a year ago to 94.1 million has mostly settled. In the meantime, the number crunchers have sharpened their pencils to a fine point and are assessing various yield and production scenarios. Next week’s crop report may offer some clues. With corn acres the highest since 2016, prices are facing an uphill struggle with a weak demand base. Last week, inspections were slightly more than the previous week at 25.1 MB and are well below the average of 46.7 MB that must be shipped weekly to reach USDA’s target of 1.725 BB. Currently, the pace is running 135 MB below the level needed to meet their projection. Bottom line—unless demand picks up immensely, price gains are limited.
Bean Outlook
Soybean futures have catapulted from the USDA lowering acres last week 3.9 million from a year ago to 83.5 million. This is the lowest acreage number since 2020. Everyone is saying that the report is a game changer. When you hear these remarks it is time to stop, take a deep breath, and consider the facts. That said, it is a reality that stocks are tightening, and next week’s crop report may offer some insight. However, demand was anemic before the price advance began in May. Last week, export inspections were 9.1 MB which is well below the average of 20.4 MB that must be shipped weekly to reach USDA’s target of 2.0 BB. As it stands now, the export pace is running 125 MB below the level needed to meet their projection. Meanwhile, China has been literally absent since early May as their business is being met by Brazil. Right now, the answer that everyone is looking for is, does the weakness in exports offset the tightness in stocks?
Wheat Outlook:
Support has begun to surface in wheat as harvest continues to creep along at 37 percent complete compared to 52 percent a year ago and 46 percent for the average. Next week will be interesting as the Black Sea grain accord is set to expire on July 14th. With increased in tensions in the region, the question on everyone’s mind is whether Russia renews the agreement. Meanwhile, exports have improved with inspections last week a marketing year high of 12.3 MB. However, they must average 14.2 MB on a weekly basis to reach USDA’s projection of 725 MB.
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