COMMENTARY 7/18/16

Heavy rain moved across IL, IN, an IA overnight and this am.  The heat will now expand and intensify all the way in to the END of the weekend into the weekend.  Temps are thought to return to a more normal level after that and then cooling. The latest GFS model is much warmer than previously thought Wed/Thurs but the widespread heat affects the Corn Belt and Plains through Fri/Sat.

St Louis river level DROPPING ~ at 13.4′ and forecast 12.0by 7/23.  

CORN

OLD ~ UP 5    NEW ~ UP 5

Trying to balance decent rains over the weekend with the hot outlook for the week. Funds bought 6,000 contracts.Export Inspections were hearty at 52.3 mill bu, topping the upper end of the 39-51 mill bu range. Good volume went to Japan with 13.3, Mexico 10.3,  Taiwan 5.8, S Korea 5.2,  and Africa at 6.3 mill.  Today’s crop ratings were expected to be +1/-1 from last week’s 76% and silking was thought to increase an 20 points to 52%.  See actuals just below.  SD, OH, and TX declined 4-6%, but IL was up 4%. Some 4 of the 5 states that produce 1 bill bu are now G/E.

Monday’s

US CONDITIONS:  76% G/E THIS WEEK,  76%  LAST WEEK, 69% LAST YEAR

IL CONDITIONS:  80% G/E THIS WEEK, 76% LAST WEEK

US SILKING: 56% THIS WEEK,  32 % LAST WEEK, 47% LAST YEAR, and 46% AVG

IL SILKING:  77% THIS WEEK,  53 % LAST WEEK,  69% LAST YEAR, and 68% AVG

BEANS     

OLD ~ UP 6       NEW~ UP 9

The forecast certainly isn’t any worse than expected (so far) and there is some uncertainty about Chinese import demand.  China’s 15/16 Imports could come in at 80-82 MMT.  This would be under the USDA’s 83.0 forecast.  China is said to be considering selling some 4 ½ MMT of Reserves and substituting that for import needs. This would be consistent with a recent attache’s report stating that their reserve stocks could be 6 MMT with concerns over quality.  Monday’s Export Inspections  were 13.5 vs expectations of 6-14 with 22.4 needed per week.  Notable improvements to Crop conditions were IA up 3% to 80% from 77%, IL up 2 % to 76% from 74%, MN up 3% to 78% from 75%, and MO up 2% to 67% from 65%.

Monday’s

US CROP CONDITION: 71% G/E THIS WEEK,   71% LAST WEEK, and 62% LAST YEAR

IL CROP CONDITION: 76% G/E THIS WEEK, 74% LAST WEEK

US BLOOMING: 59% THIS WEEK, 40% LAST WEEK, 51% LAST YEAR and 49% AVG

IL BLOOMING: 60%  THIS WEEK, 39 % LAST WEEK, 49% LAST YEAR, and 54% AVG

US SETTING PODS: 18% THIS WEEK,  7 % LAST WEEK, 14% LAST YEAR and 13% AVG

IL SETTING PODS: 15%  THIS WEEK, 7 % LAST WEEK, 12% LAST YEAR, and 13% AVG

 

 WHEAT          

UP 5

Followed the row crops.  Monday’s Inspections weren’t necessarily friendly, but at the low end,  16.1 vs expectations of 15-22 and 17.6 per week needed.

Monday’s

US WINTER WHEAT HARVESTED:  76% THIS WEEK, 66% LAST WEEK, 72% LAST YEAR, and 73% AVG

IL WINTER WHEAT HARVESTED:  97% THIS WEEK, 95% LAST WEEK, 89% LAST YEAR, and 94% AVG