We finally broke the streak as wheat corn and beans all closed higher yesterday but alas, there was no carry-through overnight and Tuesday’s trade so far is back in the negative column. Overnight news is very sparse so we are back to trading an expanding wheat harvest and thoughts of larger yields in corn and beans.
We harvested another 12% of the winter wheat crop, which stands at 69% complete. The average for this date is 68% and last year we had completed 66%. Spring wheat ratings were unchanged at 70% good/excellent with 69% of the crop headed, which is 1% above average.
Export inspections were sluggish as we shipped only 13.9 million bushels last week, down almost 20% from the prior week. Granted, it is still relatively early in the year but so far we have only shipped a total of 99.1 million bushels and now need to step the average up to 18.5 million per week to reach the USDA target of 950 million.
The overnight pressure is not enough to label the rally yesterday, as a one-day wonder and realistically a quick 2 to 3 day rally would probably be quite limited. A few days of choppy range development could actually provide us with room then for a week or two of corrective rebound. Either way, it would appear that rallies will face considerable headwind and I doubt we have seen the lows established just yet.
Corn did manage to close in the plus column yesterday but understandably was the least enthusiastic. By no means have we erased all the gains overnight but with the news at hand, we have never been in the positive column either.
It was a little surprising to wake up this morning and feel quite this much chill in the air, the corn market is still suffering little to no stress as we move through pollination. Soon I suspect that topic will turn to lack of growing degree days and without a change here soon, producers better try lock in enough gas for drying this fall. It was almost a touch surprising but the corn ratings actually bumped up 1% in the good/excellent category and now stand at 76%. Silking reached 34%, which is 1% ahead of the 5-year average and more than double the 15% last year at this date.
Export inspections came in towards the lower end of estimates at 36.5 million bushels. This was down over 25% from last week and was the second lowest weekly loading since early March. Year to date we have shipped 1.577 billion bushels and need to step the pace up to 46.2 million per week to reach the 1.9 billion bushels target.
There remains a possibility that with the extreme oversold position of the market right now that we could be into a little congestion phase, but I suspect rallies will remain short-lived as there are more than enough willing sellers waiting in the wings for the foreseeable future.
November beans did bounce fairly nicely yesterday, partially due to an oversold condition but also partially influenced by good Chinese purchases of new beans. As with corn and wheat, the overall reports yesterday afternoon provided nothing to sustain the strength and we have been soft overnight but well contained within yesterday’s ranges.
The crop rating reflected no change in the good/excellent category, which stands at 72%. A year ago at this time this category was 65%. Note that the poor/very poor group was up 1% and stands at 6%. 41% of the crop is now blooming which is 4% above the average and 17% ahead of a year ago.
Export inspections came through bit better than the past 3 weeks and above the trade expectations with a number of 4.2 million bushels. This brings the year to date tally up to 1.573 billion bushels but to reach the target of 1.62 billion, we will need to average 6.7 million per week for the next 7 weeks.
The bean crop still has the most risk in front of it and as such, should have the best potential for short-covering bounce. That said, most extended weather forecasts look pretty benign at this point and with the market psychology negative, we would need something unexpected to scare the bear.