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Corn Outlook:
Improving crop ratings for corn is pretty much unheard of going into the end of August. However, that was the case last week when the ratings rose one notch to 74 percent of the crop in good-to-excellent condition. This gave the bears more ammunition pressing the market to a new low on Wednesday Many claim that yields will top 170 bpa, while a few insist that they may reach 176 bpa. In August, USDA’s projection was 167.4 bpa. Any way that you slice it, it is stacking up to be a monster crop that will likely produce a storage and logistical nightmare at harvest. Export inspections last week were modest at 34.3 MB. Cumulative shipments for the season stand at 1.843 BB compared to USDA’s target of 1.920 BB. For the past few weeks, the trend following funds have been flip flopping in their position and are currently short a token 15 MB. However, given the improvement in the crop ratings, they will likely add to it.
Bean Outlook:
I do not know when I have ever seen the crop ratings for soybeans jump two points at the end of August. It happened last week, however, when they rose to 72 percent of the crop in good-to-excellent condition. This rattled the bear’s cage this week causing prices to sink to a new low. Some think that soybean yields will top 46.0 bpa, possibly closer to 47.5 bpa compared to USDA’s current projection of 45.4 bpa. With a yield reported last week in Mississippi of 100 bpa, who can argue the point? In the meantime, adding to the market’s woes is that a record crop is expected to be planted in South America this fall. It may take a weather problem during the growing season down there before the bears lose interest. In the meantime, they will continue to pressure the market. This was evident last week when the trend following funds added 50 MB their short position increasing it to a record 320 MB. In other developments, export inspections were a paltry 1.3 MB with cumulative shipments standing at 1.594 BB compared to USDA’s projection of 1.920 BB. Meanwhile, sales for next year are off to a healthy start.
Wheat Outlook:
There is not a great deal of fresh news in wheat. Traders continue to monitor the on again, off again conflict between Russia and Ukraine. However, unless grain exports are disrupted in the Black Sea region, corn and soybeans will dictate its direction. Wet conditions in the upper Midwest slowing spring wheat harvest has offered some support, but prices have fallen to a new low on the back of corn. Harvest is currently 38 percent complete and trails the average of 65 percent. After getting off to a slow start this season, exports have improved recently with inspections last week a marketing year high of 28.4 MB. In other developments, the trend following funds have trimmed the short position reducing it to 335 MB.
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