COMMENTARY 8/28/17

Turns out Harvey is more than they bargained for!  We’re watching an “all-time” natural disasters take place as the week unfolds for S TX.  Another 25″ are expected in some areas of TX and 9 – 18 ” in parts of SW LA.   Some crop areas from LA up into AR could have some quality production risks if the additional accums come to fruition.  The remnants circulating are thought to be absorbed by the jet stream late in the week, but not before dropping 3 – 6″ in the Delta regions, hampering harvest.  Elsewhere in the Corn Belt, it is expected to be relatively cool/dry for the next 7-10 days.

 

CORN

DOWN 3

The funds were actively increasing their short position selling more than 7k contracts today.  This afternoon’s ratings were expected to be unchanged to up/down 1.  They didn’t disappoint although, for us Illinoisans, we dropped yet another 2%.  The Farm Journal Crop Tour has our nationwide yield at 167.1, 2.4 bpa.  Still a lot of questions there.  The good news is:  Export Inspections were great at 31.7 mill vs expectations of 26 -33.  Another 160 KMT of new corn sales were announced to Mexico today.  In SA, Argentina’s Ag Minister announced Frid that a 6% import tax on phosphate fertilizer was to be discontinued starting today.  When pondering today’s cash prices, keep in mind that Prices bottom when perceived supply peaks.

Mon’s Crop Progress:

US YC DOUGH:   86%TW,  76 % LW, 91% LY, and 87% AVG

IL YC DOUGH   94% TW, 91% LW, 94% LY, and 94% AVG

US YC DENT:   44%TW,  29% LW, 57% LY, and 51% AVG

IL YC DENT:   54% TW, 41% LW, 65% LY, and 63% AVG

US YC MATURE:   6%TW,  na % LW, 8% LY, and 10% AVG

IL YC MATURE:   2% TW, na % LW, 6% LY, and 14% AVG

US CONDITIONS:  62% G/E,  62% LW, and 75% LY  ~NO CHANGE!

IL CONDITIONS: 52% G/E, 54% LW  a 2% DECREASE!

BEANS

DOWN 1

LA had a great weekend of bean harvest, but is now shut down due to excess residual rains.  Now we wait to see if quality becomes an issue. The USDA reported another 132 KMT sale to China this morning as well as 105 KMT bean meal headed for Thailand.  Export Inspections were mid range at 26.3 vs expectations of 20 – 30 mill bu.  Bean Ratings were expected to be steady, which looks spot on, but, like in corn, IL dropped another 3%.  The Farm Journal tour  has us at a 48.5 bpa US yield, 1 bpa less than the USDA’s Aug value at 49.5.

Crop Progress:

US YSB SETTING PODS:   93%TW,  87% LW,  93% LY, and 92% AVG

IL YSB SETTING PODS:   96% TW,  92% LW, 93% LY, and 93% AVG

US YSB DROPPING LEAVES:   6%TW,  na% LW,  5% LY, and 5% AVG

IL YSB DROPPING LEAVES:    na % TW,  na % LW, na% LY, and na% AVG

US CONDITIONS:  61% G/E 60% LW, and 73% LY a 1% INCREASE!

IL CONDITIONS: 57% G/E, 60 LW a 3% DECREASE!

WHEAT

DOWN 9

It always looks bleakest at the bottom.  No friends still to be found. Funds sold an est 5k contracts today.  Four futures months made new lows.  On a chart, today was the first time that Chic’s nearby futures have closed down near $4.00 since last Dec. Export Inspections were solid at 24.6 vs expectations of 17-24 mill bu.  Due to recent N dryness, Alberta, Canada’s yields are likely to be 15-20% below last year. Russia’s harvest looks to be up 6% from last year to 62.2 mill tons, 3.3 mill bigger.

Crop Progress:

US SPRING WHEAT HARVESTED:    76TW, 58 LW, 79LY, and 66%AVG