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You know how it is when you have your mind all made up as to how something is going to turn out, and then it doesn’t? There is often the sense of disappointment or letdown. Obviously, that is the way the trade felt after the release of the crop conditions report and the expectation that conditions were going to head downhill once again. Corn in the good/excellent category remained unchanged at 72%, and beans actually increased 1% and stood at 70%. Those rains that passed through the Midwest over the last week perked up the look of the plants. With that expectation sunk, (no pun intended) everyone needed to look a little closer at the rest of the weekly update and found little to excite any buying. Corn silking at 81%, 19% above the 5-year average and corn now in the dough stage at 18% compared with a normal 8%. Unless we see a usually wet September, it certainly appears we are headed for a very early harvest this year. Beans blooming have reached 78% versus a 63% average, and 44% of the plants are setting pods compared with a normal 23%. This morning we are witnessing the reaction to the trade being “disappointed” that things were not worse, as ironic as that really sounds, and we are looking at the first “real” lower session in over a week.
It seems that we have not heard much about Brazil as of late seeing that their big crop, soybeans, has been harvested, but that was made up for overnight. First, the Chinese Ambassador to Brazil made comments that the two nations were prepared to develop a “long-lasting relationship” that would take agricultural trade to new levels. Gee, one cannot imagine that was a comment directed at the U.S. For their part, the Brazilian Ag Ministry laid out their 10-year plan and are forecasting grain production of 302 MMT by 2027/28, which would be close to a 30% increase,69 MMT, over this year's production. They also project total meat production to reach 35 MMT per year during that same time frame compared with 27 MMT today. On a slightly more optimistic note, for us at least, they also stated that they are nearing the point of opening imports of pork from the U.S. and Europe. Also yesterday, the CEO of Corteva AgriScience (DowDupont) projected that soybean acreage in Brazil could increase 3 to 5% this coming year.
In a completely different hemisphere, independent consultant UkrAgroConsult updated estimates for Ukraine crops. They actually bumped their estimate for corn 700,000 MT over the previous guess to 27.3 MMT but left export projections unchanged at 21 MMT. They also trimmed the wheat production estimate by 3.1% to 24.7 MMT and lowered export projection 500,000 MT.
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