The engines are still running, but it would appear that everyone has kicked the shifter into neutral as we await the August USDA releases. Of course, the million-dollar question is, will the number prompt a shift in to forward or reverse, or any gear at all for that matter? If we were to close right at this moment, for the week, December corn would be 2-cents lower, November beans 4 ½-cents lower and December wheat 7-cents higher. Do take special note of that final commodity as if we close higher, it will be the 4th
consecutive week of doing so but more critically, we are just below that key 5.92 level that we need to begin closing above on a weekly basis for a major confirmation of a cycle bottom.
Here again are the trade estimates. Corn production is expected to come in at 14.41 billion bushels from an average yield of 176.25 bpa. This compares with the official July figures of 14.23 and 174. 2017/18 carryout is expected to fall in at 2.018 billion versus 2.027 last month and the 2018/19 carryout, 1.636 compared with the July estimate of 1.552 billion. For beans, the average estimate for production stands at 4.416 billion bushels with a yield of 49.7 bpa. The July estimate was 4.30 billion and 48.5. Current crop year ending stocks are expected to come in at 462 million versus 465 in July and 18/19 stocks at 643 million compared with 580 million previously. Total wheat production is projected to fall in at 1.853 billion compared with 1.881 last month and ending stocks are expected to 964 million versus the least estimate of 985 million. Last but certainly not least, we have estimates for world ending stocks. 2018/19 corn is estimated to fall in around 152 MMT, which would be just a smidge above July but still 20% below the current crop year. Beans are projected to come in at 99.4 MMT, which would be up from 98.27 last month and 96.02 last year. Finally, in wheat, ending stocks are expected to tally 255.46 MMT. Last month this was pegged at 260.88 and last year came in at 273.5 MMT.
We did see a nice sale of beans reported this morning in the daily system. Recorded as unknown destinations, there was a total of 210,000 MT sold, 80,000 MT for the current crop year and 130,000 for next.
The only other tidbit of news that I see worth passing along was a comment by the vice ag minister in China who stated that the friction between the US and China will have a limited impact on the Chinese ag sector and that they are fully capable of meeting domestic demand for edible oils and protein-based animal feed. I do not know about you, but to me, that sounds like the kind of rhetoric that you toss about before you sit down at the negotiation table. Everyone knows it is a crock of bull, but somehow, they think it is relevant to say anyway.
We shall know in a few hours what the USDA thinks about the current state of world production and demand, and as I have commented previously this week, if we do not find a positive surprise, these grain and soy markets all appear to be in line for a corrective setback.