Market Commentary > Weekly Crop Commentary - 7/10/20

Weekly Crop Commentary - 7/10/20

Jul 10, 2020

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The weekly crop progress report showed a reduction in the good-to-excellent category in Ohio and Michigan of 10% driven by the hot dry weather over the past week. The balance of the major crop production region has continued to receive ample rain, even with the extreme heat. The market will continue to monitor the current trend in the weather as we move into the critical pollination stage, although grain prices have turned steady to lower since the grain stocks in all position report. The price improvement last week, after the adjusted acreage report was short lived as the farmer took advantage of the price improvement and sold ownership. Corn basis continues to remain strong as end users continue to compete for just-in-time bushels. However, the soybean basis is struggling as the domestic crush is dealing with reduced profit margins and can’t compete with the export market for bushels. The bean market seems to have run out of steam as the cash price reached the $9.00-dollar level. I will let my co-workers cover the crop report that was released at noon today as we learned that we have ample stocks to get us to new crop. The next USDA crop production update will be Wednesday, August 12. Please continue to be safe and have a great week.

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Good afternoon and Happy Friday once again. We are rapidly approaching the middle point of July, it is just flying by. Wheat harvest in the Marysville area is in the books. Yields for the most part were a bit better than anticipated, but the cold snap in May did seem to hurt yield. Quality of the wheat is probably so of the best in recent years. Rains in the area still remain to be scattered at best. Some get rains of up to an inch and just a mile or so away gets nothing. Weather will remain in the forefront as the acreage numbers have been digested. It was another big week of grain movement from the producer. They know they have to make room for the upcoming crop, and time is running out. The USDA will be out today with updated supply and demand numbers, so it will be interesting to see if they begin to adjust corn usage. Many feel the demand numbers have been inflated, and the reduced acreage could provide an opportunity to make adjustments. We are in the heart of our weather driven market, so we need to remain vigilant. We have had a good rally in the markets, we don’t want to watch that erode without doing anything.

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Wheat continues to trickle in, it has been pretty good, quality wise. The weather has been good for wheat harvest, but not so good for the corn and beans. Pop-up showers have been in the area, some have benefited, others are still hoping for relief of this dry weather.

The monthly S&D report came out a noon today and wasn’t very friendly to the corn and bean markets because of less usage in feed, ethanol, and crush. Now the focus will return to the weather forecast next week.

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Good afternoon, the USDA numbers are out and the numbers reminded us today that even with the acres not as high as we thought that we still are going to have plenty of grain at the end of the 20-21 marketing year. Corn came in at 2.648 billion bushels and beans came in at 425 million bushels at the end of the 20-21 marketing year. Corn closed down .1150 cents and beans closed down .0925 cents. 6-10 day weather forecast still show a fairly large area having above normal temps and below normal rainfall so we still have that to factor in and the corn funds were still short about 175,000 contract this morning. So if we still have some weather issues they still can engage in the market place. Wheat harvest has been going pretty good. We needed about 2 or 3 more days to wrap it up over here but some areas just received some rain but others did not so I guess we will just sit back and wait. Have a wonderful weekend.

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We have seen the markets continue to react to the weather this week. We have moved corn up over 50 cents since its lows in early May. How much of run do we have left? The funds are still short so if they exit their positions we may see some fireworks. One thing to remember is that weather rallies tend to end before the weather breaks, no one left to buy the market so they market stalls out.

You may find it hard to believe that soybeans are 25 cents higher today than they were on July 10 last year. I have written over the last couple of months that I am friendly soybeans long term, but if we see soybeans at 9.00 don’t be afraid to reward the market and sell some.

It is going to be a very interesting next couple of weeks, don’t get so bulled up that we don’t take advantage of the gifts that the market is giving us.


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