Crop Conditions Stabilize
Jul 24, 2018
Good Morning! From Allendale, Inc. with the early morning commentary for July 24, 2018.
Grain markets continue to trade the similar themes of the last several weeks as on going trade concerns appear to have been priced into the market for now. Weather forecasts continue to show great conditions for crop development, but today's updated long-term forecast from World Weather, Inc. could hold a few surprises.
Allendale's Summer Outlook Conference kicks off today with Drew Lerner of World Weather, Inc. LIVE at 2:00 PM CDT. Drew will share his updated weather outlook and will be ready to take your questions. There's still time to register - don't miss it!
Crop progress out yesterday afternoon had corn rated 72% Good to Excellent (GTE), inline with last week. Traders were expecting a decline of 1%. Soybeans were 70% GTE, up from last weeks 69%. 81% of the corn crop was said to have been silking, while 44% of the soybean crop was setting pods.
Spring wheat was reported 79% GTE, down 1% from last week's 80%. Last year at this same time, the crop was reported just 33% GTE. Winter wheat was reported 80% harvested, an increase of 6% from last week.
China has announced plans to implement audits on, "policy-supported grain storages to ensure the security of grain reserves". Some in the trade believe this is the government's attempt to find out just how much grain and what quality is actually in storage.
MARS, the EU crop monitor, has reduced it's estimate of the EU soft wheat yield to 5.82 tonnes per hectare, down from the previous estimate of 6.04 last month. They note problem areas in most northern and central EU countries including Germany and Poland.
COFCO estimates that Brazil's soybean production will grow to 142.7 million tonnes by 2025/26. They see Brazilian corn production at 116.1 million tonnes by that same timeframe.
Export inspections for the week ending July 19th had wheat exports of 397,862 tonnes, corn 1,313,177, and soybeans 722,048. All three were within analyst expectations.
Managed money funds were estimated buyers of 9,000 corn contracts and 2,000 soymeal in yesterday's trade. They were sellers of 3,000 soybeans, 3,000 wheat, and 3,000 soyoil.
China said on Monday the value of its currency is driven by market forces and that it has no intention to devalue the yuan to help exports, after Washington said it was monitoring the currency's weakness amid the escalating bilateral trade row. (Reuters)
China's ambassador to Brazil, Li Jinzhang, said the two countries are set to take their ag trade to "new levels" as the US/China trade war continues to escalate.
Cold storage numbers were a bit surprising yesterday. Pork stocks were reported at 560.00 million pounds, analysts were expecting 585.00. This was the largest June pork draw-down in five years and the second largest in history. Beef stocks were 448.6 million pounds, lower than the average guess of 467.00 million pounds. The end of June count of the top three meats was 1.897 billion pounds, a record for any previous end of June.
Cattle showlist numbers were 1,900 head higher from the previous week. This is seen a neutral for the third week in a row.
Dressed beef values were higher with choice up .65 and select up 1.03. The CME Feeder Index is 148.49. Pork cutout value is down .79.