Weekly Crop Commentary - 7/9/2021

Jul 09, 2021

Weekly Crop Commentary - 7/9/2021
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The Fourth of July three-day weekend holiday set the grain prices up for some post-market fireworks. Too much of our surprise the weather models added some much-needed moisture in the 6-10 day forecast and the market reacted. The updated crop condition report has much of the US in the 60-65% good to excellent category, with Ohio currently the garden spot at 80% good to excellent. This added to the sell off and we find ourselves today down about sixty cents on both corn and beans for the week. The UDSA will be releasing its latest supply/demand figures at noon on Monday. While we don’t anticipate many changes in the July report, the trade will be looking closely at possible adjustment to the demand side of the balance sheet. The current 2021/22 carry-over numbers are 1.402BB corn and 0.148 soybeans. Both figures continue to be major concerns and will keep markets on edge until we get to harvest. The weather forecast and weekly crop ratings will be the focus of the funds moving through the balance of the growing season. Corn basis continues to stay firm locally as ethanol demand and feed needs are supporting the domestic market. Soybean crush margins are relatively good, but local processors have little if no competition for remaining stocks and are buying only what they need to get to new crop. Please continue to be safe and have a great week.

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Good afternoon.  I hope everyone kept all their fingers over the Independence Day weekend.  This was another jam-packed week as the wheat harvest was in full swing until the rains yesterday.  Both quality and yields were great on what came in.  What is still in the field will likely be of lower quality by the time it's able to be harvested.  

Last week we got a friendly acreage and stocks report that pushed the markets higher going into the extended weekend.  Rains in the driest parts of the growing areas received much-needed rains last over the weekend and more as this week went on. This sent shock waves through the grain markets to start the week, as most commodities were sharply lower. This is enough to keep the crops going, but they are not out of the woods yet as more will be needed and the forecast looks for them to stay dry.  The crops in Ohio are looking great though.  Ohio corn was 80% good to excellent while the soybeans were 77% good to excellent.  Nice rains this week with corn on the cusp of pollination, and soybeans in full bloom. What more could we ask for?

Basis levels for old-crop corn and beans have been mixed.  Corn processors to the west are the most aggressive, but back off quickly if they get some bought.  Bean processors seem to have ample coverage, but with nice crush margins, they do not want to lose any to the export market.  This has them staying steady on the week.  Once again with the steep inverse in the market, they do not want to buy one more bushel than they have to.  
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Yesterday’s forecasted precipitation was nearly spot-on for areas in South Dakota, Iowa, Illinois, Indiana, Kentucky, Ohio, and Michigan.  The forecast thru next week remains wet for Iowa and Missouri, but eastern North Dakota, northern parts of Iowa, and Minnesota could end up short again.  The cooler temperatures and rainfall are making ideal conditions for corn pollination, pushing the market lower.  USDA will come out with revised supply numbers Monday at noon.

The Holiday weekend improved Gasoline demand, both Ethanol and gasoline stocks were lower in yesterday’s DOE report.  Ethanol production jumped last week, tied for the second-best of the year.  Things are back to normal it seems.  
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I hope all of you had a great Independence Day weekend. I know some of you were busy cutting wheat. The bulk of wheat in this area was harvested Sunday-Tuesday and most were happy with this year’s results. Yields ranged from 75-95 with most falling in the mid-upper 80s, from what I gathered. The average test weight was just shy of 59, moisture around 14%, and most vomitoxin under 1.0 ppm. A successful crop!

Ideal pollinating weather across the Midwest, especially in the areas that needed it most, put the markets under pressure during this short trading week. As of noon today, old and new corn as well as old beans are down nearly 70 cents and new beans around 80 cents from last Friday’s close. Wheat is also down about 40 cents from last week. Weather will remain the driving factor in the market this summer.

Ohio’s crop condition ratings continue to be great. In fact, among the Corn Belt states, Ohio is only behind Nebraska on Good/Excellent ratings for both corn and soybeans. Ohio sits at 80% G/E corn and 77% G/E soybeans. To compare, our five-year average for each is 58 and 56, respectively. Hopefully, we keep getting these timely rains! Have a great weekend and we’ll catch you next week.
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Wheat harvest is all but complete and the crop was very good quality.  Yields for the most part were in the 75 to 100 range. We did see a little vom on later-planted wheat but not a big issue. 

The markets after July the 4th have taken a risk off approach as the weather forecast for the next few weeks looks favorable.  Now the other side of that coin is that if we do not see rains materialize then we could see prices work back higher.  History tells me that highs are generally made by the July 4th holiday UNLESS we have a major weather problem going forward.  We will have to wait and see.

The farmer today has new crop sold and is not making any new sales until he feels confident in his crop prospects.  Today they look very good in my area.  We will have to see what Mother Nature does for us over the next 60 days.
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Good Afternoon, This week's markets continued to show how volatile we still are. Once we got past the holiday weekend we saw the markets collapse on Tuesday with corn locked limit down at -.40 cents per bushel and beans down -.89 cents. All of that was driven by a change in the weather forecast showing some of the driest areas in the western corn belt getting some rain. The bottom line is that they did receive some rain but it was not as much as they had forecasted. It did help the crop but now we will need to see what happens from here. The late week forecast shows once again that there is a high-pressure ridge setting up over the far western part of the US and another high setting up off the east coast holding an upper-level low-pressure system parked in the middle of the country. The forecasters I am following say we will once again have some areas getting some rain and other areas not so much. Monday we will get another carryout number from USDA. We will see the new acreage numbers now used for the 21-22 carry-outs. The markets will continue to be volatile for the next 30 to 60 days until we know more about the size of the crop. Like I said last week, crawl into your car of choice on the roller coaster and buckle up for the ride. Have a good weekend!!!!

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