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Corn Outlook:
Corn cannot seem to shake the prevailing bearish sentiment. This is largely because we normally see a weather concern during the growing season, but one did not develop this time. Furthermore, sixty-eight percent of the crop is rated in good-to-excellent condition, which is above the year ago rating of 57 percent and the average of 67 percent. Meanwhile, ending stocks of 2.0 BB are abundant, and global stocks are 1.0 percent more than a year ago. Looking at exports, they are mostly stagnant. Inspections last week were 42.4 MB and below the average of 67.0 MB that must be shipped weekly to meet USDA’s projection of 2.225 BB. The bottom line in corn is there are few influences that are present to entice the bulls. However, the funds are currently short 1.610 BB, their largest position since February. When they covered their position back then, prices rose 11 percent.
Bean Outlook
Soybeans are carrying a lot of baggage from expectations of a record crop in Brazil of 169.0 million tons, and world stocks that are forecast to rise 14.8 percent over a year ago to 127.8 million tons. Furthermore, the U.S. crop is in good shape at 68 rated in good-to-excellent condition compared to 55 percent a year ago and 63 percent for the average. However, that could change during August, but no threatening conditions are on the horizon as of now. Meanwhile, exports have fallen off the wagon. Last week, inspections were a marketing year low of 6.1 MB, and well below the average of 16.1 MB that must be shipped weekly to reach USDA’s target of 1.7 BB. In the meantime, where is China? They have not received a shipment from the U.S. exceeding 1.0 MB since the first week of June. The bottom line in soybeans is that the market is technically oversold, and the funds are short 880 MB, their largest position since February. However, an event is needed that triggers them to cover.
Wheat Outlook:
Wheat is meeting a headwind because of weakness in corn and soybeans. If it were not for their decline, prices would probably be higher for a couple of reasons. One, global stocks have been on the downswing since 2019. Two, stocks-to-usage have fallen during the same period. Also, the USDA has raised their estimate for U.S. exports to 825 MB. Last week, inspections were solid at 19.6 MB, which was above the average of 16.1 MB that must be shipped weekly to meet USDA’s target. In other matters, winter wheat harvest is progressing at a rapid pace and is 71 percent complete compared to 53 percent a year ago and 62 percent for the average. The bottom line in wheat is the funds are short 450 MB and have begun to cover their position. However, more time may be needed before traders see that the fundamentals are slowly improving.
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