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By nature, markets tend to focus on short-term things, stories or other events that are the most current, regardless if they create a major influence on the long-term picture. I guess that is human nature as it is must easier to grasp hold of the immediate as we can see how that will impact us today, not weeks or months or years from now. It is not unlike people setting aside money for retirement. You know you should be looking years ahead, but the immediate needs can too often get in the way, particularly when you are constantly bombarded with ads for things that they tell us we absolutely NEED. Anyway, regardless of the longer-term situation, particularly in the global grain sector, most of the news around this morning leans to the negative and markets are reacting accordingly.
The primary story would appear to be the ongoing ProFarmer crop tour as the results for day two appeared to mimic day number one. In the state of Indiana, they have come up with an estimated corn yield of 182.3 bpa compared with last year at 171.2. In beans, the pod counts added up to 1311.9 versus 1168.8 in 2017. Over on the western edge of the corn belt for the of Nebraska, the tour estimated a corn yield of 179.2 bpa versus 165.4 last year and bean pod counts of 1299.1 compared with 1131 last year.
On the international scene, stories of Russia curtailing exports appears to have faded into obscurity for now, and while there have been additional stories published concerning the damages from the drought this year in Germany, they appear to have largely fallen on deaf ears or at least considered a known factor. There were also additional reports from China concerning the spread of African swine fever with over 20,000 hogs now culled.
The good news is that all of this is now old news and while there is no guarantee the next will be positive, we are quickly approaching the time when the focus of the market shifts from supply to demand. Weekly export sales will be released in the morning which could create a stir, but overall, I suspect we will see prices remain in a defensive posture until we move beyond the Labor Day weekend but will be looking for a seasonal low around that time.
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