COMMENTARY 6/26/18

From Sec of Ag Perdue on trade, “ We have not unveiled our strategy, as it is not good practice to open our playbook while the opposing team is watching. But farmers should know this: They have stood with President Trump and his policies, and we will make good on our promise to stand with them as well. If China does not soon mend its ways, we will quickly begin fulfilling our promise to support producers, who have become casualties of these disputes.”

Warmer temps but we DO have rain to go with it!  – enough for the next two weeks worth!

 CORN

UP 2
Market talk says the government may begin CCC purchases to protect producers from the downward price movement if the trade war with China continues.
Lots of rain makes grain.  Cordonnier raised his US yield est 2 bpa to 178.0 for a 14.27 bill bu crop and compares to the USDA’s  14.040. He lowered his acreage to 500 mill less than the USDA at 80.2.  Yesterday’s condition ratings were down 1 to 77% G/E, still 10 better than last year and 7 above the 5 yr!  These conditions are among the top 5 since 1990!  In SA, the freight disputes in Brazil continues to disrupt the movement of goods (like fert) needed prior to corn and bean planting, starting in late Aug.  Brazil exported NO corn last week.  Our exports, on the other hand have been a record 64 mill bu per week.  Friday’s report is thought to see the avg guess on Prod to be around 5.276 bill bu in a 5.0-5.5 range.

Crop Progress:

US YC CONDITIONS:  77% G/E, 78% LW, and 67% LY

IL YC CONDITIONS:    83% G/E,   81% LW,  62% LY

US SILKING:   5% TW,  na % LW, 4% LY, and 3% AVG

IL SILKING:   2% TW,  0% LW, 2% LY, and 1% AVG

BEANS              

DOWN 7

Weather continues to be favorable and the cost of Brazil beans demand a premium as tariff issue escalates due to Chinese demand.  China is also expanding its feed ingredient procuring, eliminating import tariffs on beans, meal, and rapeseed from Bangladesh, India, Laos, S Korea and Sri Lanka starting July 1.  This should encourage more imports while reducing its dependence on our US beans.  BUT: This should have a minimal effect since five of those countries only export (less than) 2 MMT of meal and only 300 K MT beans in a given year. Cordonnier raised his US yield 1 bpa to 51 to make a 4.52 bill bu crop.  It compares to the USDA at 4.280 bill and 88.7 mill acres.  He left his SA Prod unchanged with Brazil at 117.0 and Arg at 36.  Yesterday’s rating continue to be decent.

 

 Crop Progress:

US YSB EMERGED:   95% TW,  90% LW, 93% LY, and 89% AVG

IL YSB EMERGED:   97% TW,  93% LW, 96% LY, and 92% AVG

US YSB BLOOMING:   12% TW,  na % LW, 8% LY, and 5% AVG

IL YSB BLOOMING:   23% TW,  3% LW, 6% LY, and 3% AVG

US YC CONDITIONS:  73% G/E, 73% LW, and 66% LY

IL YC CONDITIONS:    78% G/E,   77% LW,  and 70% LY

 

WHEAT

DOWN 7

S Korea removed its suspension of Canadian imports with weather and trade issues continuing to affect.  Winter ratings yesterday dropped two to 37% G/E vs the expectation of being just one lower. Spring conditions were weaker at 77% and up 37 points from last year, and just one below the average.  Fri’s report is expected to see acres drop 190k (180 is spring) to 47.15 mill.

 Crop Progress:

US WINTER WHEAT CONDITIONS:   37% G/E TW,  39% LW, and 49% LY

IL WINTER WHEAT CONDITIONS:    53% G/E TW,  58% LW, and 64% LY

US WINTER HARVESTED:     41% TW, 27% LW, 39% LY, and 33% AVG

IL WINTER HARVESTED:     66% TW, 30% LW, 76% LY, and 41% AVG

US SPRING WHEAT HEADED:   34% TW, 9% LW, 33% LY, and 27% AVG

SPRING WHEAT CONDITIONS:   77%G/E TW, 78% LW, and 40% LY