COMMENTARY 7/25/17

Yesterday’s odd crop ratings are STILL doing some S~H~O~C~K~I~N~G.  A sharp deviation in soil moisture exists as the SW third of the Corn Belt is too dry, while the NE third is now wetter than need be. The models…..some models are showing large, widespread accum of 1-3”for the driest areas, while other are not so enthusiastic, with more scattered chances of 1/2″ to 1.5” accum.  The 6-10 day forecast shows below normal temps AND below normal precip.  Locally, we do have a 20-40% chance of rain on Wed/Thur, but for our dry areas that haven’t been getting rain, tomorrow’s forecast 98′ deg should finish putting the proverbial nail in the coffin.

 

CORN

DOWN 8

Favorable weather models take their toll on the market, despite yesterday’s ratings decline.  Corn rated G/E, dropped 2 points to 62%. The trade was expecting a 1 point decline.  Our current rating is 14 below last year but IS even with the 5 yr avg.  Cordonnier lowered his yield estimate 1.5 bpa to 163.5 and has Prod at a 13.63 bill bu.  This compares to the USDA at 170.7 bpa and a 14.255 bill bu crop.  Topsoil moisture in the adequate/surplus group is 6 lower 54%, 13% below last year, subsoil moist was also 6 lower at 58%, 12 points below last year.  In SA, Brazil growers are still slow to sell.  The winter corn crop is 34% sold, down from 64% last year.  Harvest is approx 40% complete, 16 points behind last year.  KEEP watching the weather MODELS.

Yest’s Crop Progress:

US YC SILKING:   67%TW,  40% LW, 76% LY, and 69% AVG

IL YC SILKING:   83% TW, 63% LW, 88% LY, and 85% AVG

US YC DOUGH:   8%TW,  na % LW, 12% LY, and 13% AVG

IL YC DOUGH   7% TW, na % LW, 16% LY, and 22% AVG

US CONDITIONS:  62% G/E,  64% LW, and 76% LY a 2% DECREASE

IL CONDITIONS: 63% G/E, 62% LW  a 1% INCREASE??

BEANS

DOWN 16

Cooler and wetter forecasts for the already wet areas?  Nov futures had a 43 cent range.  Bean condition ratings dropped SHARPLY yest by 4 points to 57%.  Our good ol’ IL ratings were down even further with an 8% drop!!  Cordonnier lowered his yield est 1.0 bpa to 46.5 to create a 4.12 bill bu crop.  This compares to the USDA’s 48 bu yield and a 4.260 bill bu crop.  Detrimental bean time is another 2-3 weeks out.  Wonder what surprise they’ll have for us by that time?

Yest’s Crop Progress:

US YSB BLOOMING: 69% TW,  52% LW, 74% LY, and 67% AVG

IL YSB BLOOMING:    77% TW, 56% LW, 74% LY, and 71% AVG

US YSB SETTING PODS:   29%TW,  16% LW,  33% LY, and 27% AVG

IL YSB SETTING PODS:   33% TW,  17% LW, 30% LY, and 29% AVG

US CONDITIONS:  57% G/E,  61% LW, and 71% LY a 4% DECREASE!

IL CONDITIONS: 59% G/E, 67% LW an 8% DECREASE!

 

WHEAT

DOWN 15

Same story in wheat  -> lower despite that the 2 week outlook is dry and the dry wheat areas are STILL dry.  Crop scouts made their way across the Dakotas today. Lots of yields near 50 to the E, but quickly drops off as they moved to the W. One group est the ND crop at 170 mill bu and compares to the USDA at 196 mill.  The entire Spring Wheat Production could be have shrunken to be in the low 360 mill bu range. The Funds may be expecting an even smaller crop of say a 320-330 mill bu crop.  ->IF <-  the tour comes out with a crop size of 360 or HIGHER, expect volatility to be ripe!  Also in the world of wheat, dry weather in Spain is expected to reduce their crop by over 40%, from 6.9 MMT last year to just 4.0 this year.  Russia, is expecting a bigger crop from 67 MMT last year to 69.5 this year and compares to the USDA’s est of 72.0 MMT.

Yest’s Crop Progress:

SPRING WHEAT CONDITIONS:    33 G/E% TW, 34% LW, 68% LY   Another 1% DECREASE!

US WINTER WHEAT HARVESTED:   84% TW, 75% LW, 82 LY, and 80% AVG

IL WINTER WHEAT HARVESTED:    100% TW, 100% LW, 99% LY, and 97% AVG