We have defensive overnight trade across the floor but understandably wheat appears to be the least impacted. As I have noted previously, wheat should have already factored in much of the supply situation, at least on the domestic front, into current price levels but still lacks a demand stimulus to move us away from this base. We do know that Egypt has set a tender for an unspecified amount for shipment between September 21st and 30th but in all likelihood, this will be filled from the Black Sea and/or Europe.
There is a slight concern about the recent wet weather across the northern plains states and Canada hampering wheat harvest but the most recent updates do promise a drier pattern. While conditions remain solid albeit slightly lower at 66% good to excellent as of the 24th, spring wheat harvest stood at only 27% complete compared with an average of 49% and even last year at 39%.
Export inspections have been consistent over the past several weeks and last week we shipped 20.5 million bushels. This is slightly ahead of the 10-week average of 17.8 million and brings the year to date total up to 210.88 million bushels. To reach the USDA target of 925 million will now need to post a weekly average of 17.9 million bushels.
I did read overnight that France may be shopping around for good quality wheat to blend with the moisture damaged crop they are dealing with this year. While that does not change the overall supply situation around the world, and could very well come from Russia, it could provide a much needed demand spark for this market.
While still holding the 5-week base, corn was under pressure yesterday and has been again overnight with very little news to provide support. Recent moisture has turned excessive in some areas of the upper Midwest but any damage in low-lying areas would have occurred long ago so the benefits far outweigh any problems. The trade should now be completely focused on the finishing touches of this crop with ideas of early frost fading quickly.
The weekly crop conditions showed improvement with all the recent moisture and the good/excellent categories actually picked up 1% and stand at 74% good/excellent. This is the best rating for this time of year since 1994 and normally, we would have already been seeing these numbers slip as the crop begins to mature. Corn in the dough stage is slightly ahead of normal at 83% compared with the normal 78% but corn denting is 8% behind average at 35%. Regardless, the trade will be fully expecting the yield numbers on the August and possibly the October reports to continue to move higher and I expect soon after the Labor Day weekend that will again be the topic du jour. Dr. Cordonnier raised his corn estimate to 170 b/p/a yesterday.
Corn exports were better than expectations, coming in at 43 million bushels. This brings the year to date inspections up to 1.809 billion bushel with one week to go. We will need to wait for the census number to determine how close we are to the 1.92 billion bushels target.
Early yield reports in the south have been sparse, as it would appear farmers have attacked beans first to try and capture the inverse market and current premiums. Reports out of Texas though, just say yields have been exceptional.
I suspect the corn market could stumble and bumble through the balance of this week traders may be reluctant to enter new positions in front of the end of the month and a long weekend. That said, if we have found nothing positive to work with by the time trade starts again then in September, you have to believe the path of least resistance will be lower.
As I commented under corn, we do have a little harvest activity kicking in to the south as farmers try and capture the inverse premium for nearby values. Mississippi reports 2% harvested and Texas 8% and while yield numbers are sketchy, there have been reports of 70+. Cordonnier raised his U.S. bean estimate ½ bushel yesterday to 45.5 which basically just keeps him at the same level as the USDA and the Pro Farmer tour.
Bean rating slipped 1% last week but remain at a solid 70% good/excellent and like corn are at the highest rating for this time of year since 1994. Beans setting pods climbed 7% to 90% leaving us 1% ahead of the normal pace.
We are just about to close out a very interesting to say the least, marketing year and we posted comparatively decent export sales for this next to the last week. The total loaded was 5.3 million bushels, which compares with the 10-week average of 3.3 million and brings the year to date tally up to 1.593 billion bushels. We do not have to look back too many months and the debate was over if there would actually have been enough beans to make it until new crop arrives. As I have stated many time before, when you know about a problem long-enough in advance there will most likely never be a problem. That is exactly how a free market is supposed to function.
While still quite grudgingly, November beans keep chipping away into lower ground and this morning we are finally reaching down to the upper end of the gap targets at the 10.20 level. I continue to believe we should see this market settle out between 10.20 and 9.80 but could then move into a new congestion pattern at this price range.