Crop Progress Still Below Expectations

Published on: 21:36PM Jun 25, 2019

Good Morning from Allendale, Inc. with the early morning commentary for June 25, 2019.

Grain markets continue surging higher as too much rain and unfavorably cool temperatures continue to be the theme for this planting season.  Luckily, a warmer and drier pattern is in the forecast for the next few weeks, which should promote crop development and allow saturated fields to drain.  Commodity funds were net buyers of corn, wheat, soybean and soymeal futures contracts yesterday and net sellers of soyoil, traders said.

Weekly crop progress report showed corn planting at 98% complete (92% last week, 100% last year and 100% 5-year average).  Corn condition rating at 57% GTE (59% GTE last week).  Soybean planting at 85% (88% expected, 77% last week, 100% last year and 95% 5-year average). The first soybean condition rating at 54% GTE (59% expected, 75% GTE last year, 69% GTE average and 55% GTE low in 1993).  Hard red Spring wheat rating at 75% (77% last week).  US winter wheat rating at 61% GTE (64% GTE last week).

USDA annual acreage report will be released this Friday at 11 a.m. CST.  Analyst estimates for corn plantings on this report are 86.662 million acres of corn (89.800 million acres June WASDE, 92.792 million acres March forecast). Soybean plantings average estimate at 84.355 million acres (84.600 million acres June WASDE, 84.617 million acres March forecast).  All wheat plantings average estimate at 45.654 million acres (45.800 million acres June WASDE, 45.754 million acres March forecast).

President Trump targeted Iranian Supreme Leader Ayatollah Ali Khamenei and other top Iranian officials with sanctions, taking an unprecedented step to increase pressure on Iran after Tehran's downing of an unmanned American drone last week.  Trump said the sanctions "will deny the Supreme Leader and the Supreme Leader's office, and those closely affiliated with him and the office, access to key financial resources and support."

Chinese Vice Premier Liu He held a phone conversation with U.S. Trade Representative Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin, China's Ministry of Commerce said.  During the call, the Chinese and U.S. officials exchanged opinions on trade and agreed to maintain communications, the statement said.

President Trump views this week's meeting with Chinese President Xi Jinping as a chance to see where China stands on the two countries' trade war, and is "comfortable with any outcome" from the talks, a senior U.S. official said.  "The president has been quite clear that he needs to see structural real reform in China across a number of issues and a number of sectors, and nothing about that has changed," a second official said. "The fact that talks broke down in May hasn't changed that as the ultimate goal," the official said.

USDA weekly export inspections showed corn exports at 617,740 tonnes (678,024 tonnes last week), soybean exports at 682,155 tonnes (680,370 tonnes last week) and wheat exports at 406,386 tonnes (382,371 tonnes last week).

Saudi Arabia's SAGO said it bought 900,000 tonnes of feed barley in an international purchasing tender.  The offered origins were the European Union, Black Sea region, Australia, North and South America (excluding Canada), SAGO said.

Lean hog futures contracts ended the day over $3.00 lower in response to the disappointing numbers released on last week’s Cold Storage report.  The report showed a 7 million lbs. increase in pork stocks last month (18 million lbs. drawdown is 5-year average).

Cash cattle prices last week averaged $110.48. This is about $2.00 under last week, but $1.50 over last year.

Dressed beef values were mixed with choice down 0.08 and select up 0.26. The CME feeder index is 131.41.  Pork cut-out values were up 0.60.