CORN HIGHLIGHTS:

• Corn futures fell for a second straight session, pressured by strong crop ratings and favorable weather forecasts, leading to moderate losses across the market. The lead month September contract closed back below the psychological 400 price level.
• Weekly crop ratings for corn remain unchanged at 74% G/E. Ratings would have likely improved, but rating drops in Colorado and Pennsylvania limited any movement. Regardless, this is the best rated corn since 2016. The final yield in 2016 finished 3.9% above the trend line yield to start the marketing year.
• Weather forecasts continue to moderate heading into August, adding pressure to the grain markets. Following a stretch of above-normal temperatures, early August outlooks are now calling for below-normal readings, which should reduce crop stress and support kernel fill.
• South Korea’s Mill Feed Group is looking to purchase corns and current bids for export corn for fall delivery have Brazil and Argentina prices at a discount to the U.S.
• Brazil corn harvest has been picking up speed, supported by improved weather. As of July 19, the second crop corn harvest was 55.5% complete, up nearly 14% over last week, but still well behind the 5-year average. Recently, wet weather and the logistics of handling a record corn crop have limited harvest progress.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day lower but came off their lows earlier in the day. The November contract took out yesterday’s low and is trading below the major moving averages. Yesterday’s Crop Progress report saw crop ratings fall slightly which should be supportive especially if weather gets hot and dry throughout August.
• Soybean oil followed crude oil lower today, while soybean meal found support on reports that President Trump is nearing a trade agreement with the Philippines. The potential deal could boost export demand for both soybeans and soybean meal.
• Yesterday’s Crop Progress report saw crop ratings for soybeans falling by 2 points from last week to 68% good to excellent. This is on par with this time last year. 62% of the crop is blooming compared to the average of 63% and 26% is setting pods which compares to the average of 26% at this time of year.
• In China, soybean imports from Brazil have reportedly risen by 9.2% from the previous year. This was driven by a strong Brazilian harvest along with the ongoing U.S. trade war. Last month, China imported 86.6% of their total imports from Brazil alone.

WHEAT HIGHLIGHTS:

• Wheat finished the session with gains in each class, despite a lower close for corn and soybean futures. The lower US Dollar offered support to wheat, as did talk that globally, farmer selling has slowed and end users may be bidding up for Russian wheat. To add to that, the drop in US spring wheat crop ratings also lent a helping hand.
• Yesterday afternoon’s crop progress report indicated that the US winter wheat harvest is 73% complete, compared to 75% last year and a five-year average of 72%. Furthermore, the spring wheat crop condition fell 2% from last week to 52% good to excellent; the crop is 87% headed which is in line with last year an 1% behind average.
• Interfax has estimated Russian 25/26 grain exports will total between 53-55 mmt. Of that amount, wheat is expected to account for 43-44 mmt, which would be in line with last season. In addition, they left their grain harvest estimate unchanged at 135 mmt, with 88-90 mmt of that being wheat.
• Iraq is reported to have harvested 5.119 mmt of wheat this season. With reserves of about 1.5 mmt from last year, the total is closer to 6.5 mmt. Despite a drought, this is the third consecutive year in which their government did not need to import wheat for their subsidized food program. New irrigation has helped, and they are reportedly working to build more silos to increase their reserves.
• According to CONAB, 91% of the projected wheat area has been planted in Brazil, which is in line with last year and the average. Region by region there is some variance, however, with 99% of Parana planted, but only 39% complete in Santa Catarina.

DAIRY HIGHLIGHTS:

• Prior to the report release, Class III futures finished either unchanged or with small losses. The August contract fell 6 cents to $17.57 at settlement.
• Spot cheese was unchanged again with no loads traded today. Spot whey was down 1.50 cents to finish at $0.5475/lb.
• Class IV futures were similar to Class III action today. August was unchanged at $19.15.
• Spot butter fell 2.25 cents today on top of Monday’s losses, finishing at $2.4775/lb. Spot powder pushed to $1.3025/lb.
• June Milk Production totaled 19.233 million lbs, 3.30% higher YoY. Cow numbers came in at 9.469 million head, up 146,000 head from a year ago.

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Author

Brandon Doherty