-Impressive crop condition improvements weigh on prices
-US weather outlook remains non-threatening
-No USDA sales announcements
-Egypt tenders for wheat
Overnight news was quite limited, leaving the grain markets to focus primarily on yesterday afternoon’s Crop Progress update reflecting widespread notable improvements in corn and soybean conditions over the last week. With no stretches of severe heat in the forecast now through mid-August, expectations/confidence in good yields is increasing. Malaysian palm oil futures saw another day of significant weakness, with benchmark Oct futures falling 2.6%, putting the 2-day pullback at a very solid 6.3%.
U.S. corn and soybean crop conditions both improved by 3% in good/excellent last week to 72% g/e vs wire service-reported average expectations for unchanged conditions and the best expectations for 2% g/e increases. Both crops saw impressive, widespread improvements. For corn, IL conditions surged 11% in g/e to 74%, while MI was up 8%, NE up 9%, and IN, OH and KS all posted 6% g/e improvements. IA declined by 3%. The overall condition of the crop is the 5th best of the last 16 years and remains modestly below those of 2018, 2016 and Nationwide, 82% of the crop is silking vs 75% average, with most major states falling in a range of 85-90%, as the pollination yield risk period passes without concern.
Soybeans saw impressive condition improvements including 10% g/e increases in KS and MI, 9% increases in IL and NE, 6% in OH, 5% in IN, 4% in MO and MN and 3% in SD. As in corn, IA declined 3%, while SD also saw a 5%. With the increase in conditions, the overall U.S. soybean crop rating now matches 2014 for the best conditions in late July in 26 years. Nationwide, 43% of the crop is setting pods vs 36% average, with eastern belt states mostly in line with average and western belt states ahead of average. A few good August rains should allow for some impressive yields to be realized.
U.S. spring wheat conditions improved by 2% g/e last week vs unchanged expectations, with ND and MN up 2%, MT up 1% and ID up 10%, while SD was unchanged and WA down 4%. Overall conditions are slightly above the 10-year average, but below last year and 2018. Spring wheat harvest is just underway at 1% complete vs 3% average.
Winter wheat harvest is now 81% complete vs 82% average with only northern states remaining for the most part, with the HRW and SRW harvests essentially complete.
For full details on yesterday afternoon’s USDA Crop Progress update, please see our Market Insights post at
Ag consultant Arc Mercosul sees next year’s Brazilian soybean crop rising to a record 129.2 MMT from their estimate of this year’s crop of 124.9 MMT, based on expectations for a 3.8% increase in planted area to 38.4 million hectares (94.9 mil acre), in what would be the largest percentage area increase since 2014/15. For comparison, USDA is currently estimating this year’s crop at 126.0 MMT and next year’s at 131.0 MMT.
Indonesia now sees 2020 biodiesel consumption at 8.3 million kiloliters (2.19 billion gallons), reflecting a considerable reduction from ideas stated only two weeks ago of 9.6 mil kl (2.54 bil gal).
After the close yesterday, Egypt tendered for an unspecified amount of wheat for Sept 1-10 shipment. The two lowest offers were Russian at $228.05-$228.85/tonne c&f, while Ukrainian wheat was offered at $229.87/tonne c&f. In their last purchase on July 21, Egypt bought 115k tonnes of Ukrainian wheat at $224.48-$227.28/tonne c&f.
There were no USDA sales announcements this morning. It will be interesting to see if there is some “tire kicking” today on the price weakness.
Friday is first notice day for August soybeans. No deliveries are expected.
Rains of .40-1” were seen yesterday generally south of a line from Kansas City to Cleveland. Conditions will be fairly quiet across the corn belt today and most of tomorrow and then by later tomorrow through Saturday, showers and thunderstorms will bring rains of .50-1” to most of MO and IA, as well as the southern ½ of IL, the southern 2/3 of IN and western 1/3 of OH. Totals elsewhere look to be in the .35” range or less in most cases. The 6-10 day forecast sees fairly limited rains for most of the belt, with some rains likely across IN and OH by early next week, with totals of .25-.75” most common. The 11-16 day outlook sees a weak NW flow aloft to occur for most of the period, with some brief spells of a zonal (west to east) flow. This setup would bring average to a bit below average rainfall to the Midwest, with temps to run average to a bit below.
Temps will run above average for early this week and then a bit below for the rest of the week. The 6-10 day sees temps to run near average.