It was nice to see that prices could actually rally and hold the gains for the close but not surprisingly, that strength did not extend into the overnight hours. We sit not only at the end of a month, but also the end of the calendar quarter and on top of that a report to be issued today and if all we can muster is one session of higher prices, the bears are entrenched indeed.
Outside of the grain stocks and winter wheat estimates to be released at 11:00 this morning, there is little fresh news. On the weekly updates the USDA reported that spring wheat harvest had reached the 94% complete mark, just 2% behind average and winter wheat planted remains ahead of normal and stands at 43%. Emergence stands at 14% compared with 12% average. Export inspections were better than estimates coming through at 21.1 million bushels. This was right at the 10-week average of 20.5 million bushels and brings the year to date tally up to 325.60 million. We do have a little better lineup showing for tenders so exports sales could look better moving ahead.
As I have commented previously, the reports this morning should be largely overshadowed but the harvests news but there is always the possibility for a surprise popping up in some category. The average estimate for total wheat production stands at 2.033 billion bushels. The September 1st stocks figure average estimate is 1.894 billion.
I guess I should not scoff at any strength as one of these days it will begin to extend into something new but that little blip we saw in corn yesterday certainly did nothing to strike fear into the hearts of the bear. We were not even quite able to push back to Friday’s highs let alone resistance that begins around 3.30 but there is always a possibility that we could still see a little more end of month/quarter profit taking into the close today. Of course, that would probably require something positive from the grain stocks reports and I am not going to hold my breath for that. The average estimates for the 11:00 report range from 1.181 to 1.185 billion depending in the survey you want to use. I would be surprised to see that figure come in higher than estimates but more on that another day.
While not surprising, the overall crop development and by extension harvest continues to run behind average. As of the 28th, NASS believes corn mature stands at 60% compared with an average of 70%. The overall condition remains unchanged at 74% good/excellent, which in itself is amazing but somewhat meaningless at this point and harvest increased 5% to 12% complete, which is 11% behind the average pace. For the three I states, Iowa was just 2% harvested compared with a normal 15%, Illinois at 14% vs. 34% and Indiana at 11% compared to the normal 21%.
Export inspections were a bit dismal at 23.7 million bushels, which was below the lowest estimates. The 10-week average is 37.2 million and year to date we have now loaded 134.44 million. This means we need to average 33.7 million a week moving ahead to reach the 1.75 billion target.
I spoke with a few farmers here in Northern Illinois yesterday who have begun a little early harvest and have been a bit disappointed with what they have found so far. Granted, these are early varieties and the moisture is still a little high but what that have found was a good volume of grain but a slightly disappointing yield due to below average test weight. This sampling is hardly large enough to be representative of the crop up here but as I have commented previously, in the travels I have done this summer, this region looked as poor, for lack of a better word, as any I have seen.
There was an interesting story posted on Reuters overnight that said the government in China is planning to begin a media campaign in support of GMO’s. Could it be that they are getting their inventory issues under control and are now looking towards the inevitable futures where they will need to be less finicky about imports? Time will tell.
We do have a few showers passing through this week and colder temperatures as well but assuming there are no surprises in the stocks figures, after today the focus should completely turn to harvest and I suspect we will be headed for the harvest lows during October.
The rally in beans yesterday looked almost impressive in light of the time of year but when you consider we did not even quite reach back to the highs posted on Friday, not so much. Prices are a bit softer this morning but we have only surrendered a fraction of the gain so far.
The rains that are to move across the Midwest this week should slow down harvest activity but a nice shower should help plants shed the last of their leaves. As with corn, it is amazing that the weekly rating remain solid and in fact this week, the good/excellent rating was up 1% to 72%. Plants dropping leaves did increase 14% to 69%, only a couple behind normal but beans harvested is 7% behind average at 10% complete.
Exports inspections we very solid as beans are finally making their way to export facilities and we loaded 25.2 million bushels. This bring us up to 54.76 million bushels for the year, which is actually 50% ahead of last year at this point but we do need to see the pace increase to 34.3 million per week to reach the USDA target of 1.7 billion.
The average estimates for today’s grain stocks report is 130 million bushels with a range of guesses between 100 and 150 million. As with corn, after today the focus returns to harvest weather, yields and estimates for the October 10th production estimates.