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Corn Outlook:
Corn is being plagued from expectations the crop size is increasing. However, it faces some long-term hurdles as well. One is that global population growth has slowed, while China’s growth rate is declining. Because of this, usage has been flat since 2020. Meanwhile, the trendline yield is rising along with production which has created a surplus of stocks that will act as a headwind to values. Furthermore, competition from South America is growing. These are issues that are not going away and must be considered going forward. In other matters, the crop rating rose one-point last week to 68 percent in good-to-excellent condition. This compares to last year’s rating of 55 percent and the 10-year average of 66 percent. Looking at exports, inspections last week were up slightly to 41.6 MB and well below the average of 77.5 MB that must be shipped weekly to meet USDA’s projection of 2.225 BB. Currently, they are on track for shipments of 2.040 BB.
Bean Outlook
August is a crucial period for soybean development, but concerns are largely absent as the forecast looks mostly favorable through mid-month. Last week, the crop rating fell one-point to 67 percent in good-excellent condition but is above last year’s rating of 52 percent and the 10-year average of 63 percent. Looking at exports, inspections last week were up from the previous week at 14.8 MB, but below the average of 25.7 MB that must be shipped weekly to reach USDA’s target of 1.7 BB. China was mostly a no show. Currently, shipments are on track for 1.625 BB. Longer-term, soybeans face the same issues as corn. Usage has been flat from 2020 while yields and production are rising, creating a stock surplus. Meanwhile, production in Brazil is at a record, and they are not going away as a competitor. This will act as a headwind to price appreciation.
Wheat Outlook:
There is little fresh news in wheat. Winter wheat harvest is winding down at 82 percent complete while the harvest of the spring crop is just beginning. Export inspections, at 15.9 MB, rose from the previous week’s marketing year low, but were below the average of 16.2 MB that must be shipped each week to meet USDA’s projection of 825 MB. Wheat will likely follow the direction of corn.
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