- Chicago weather
- Looking at what the market is looking like…does it look like 2012?
- What happened in 2012 with the market?
- Can we learn from marketing in 2012 for 2020?
- Feed Demand
For the first full week of July corn and soybean ratings started to drop slightly across the nation.Corn silking is the first crop condition area we see that is actually behind the five year average. Winter wheat harvest is rolling along ahead of schedule in most states. Top soil and subsoil moisture continue to be dry and dropping across the country.
NASS estimated that 71% of the corn crop was in good-to-excellent condition as of Sunday, July 5, down 2 percentage points from 73% the previous week but still well above 57% at the same time a year ago.
For corn Iowa and Minnesota set at the top of the pile with 85% good-to-excellent condition ratings. Pennsylvania stays a close second at 82% and Nebraska it towards the top at 74% good to excellent. On the opposite end of the scale Michigan and Colorado have the highest percentage of corn rated very poor to poor, at 14% and 16%, respectively.
Up to this point in the growing year much of the crop progress has been well ahead of the five year average. Corn silking however continues to to run behind the five year average. NASS estimated that 10% of corn was silking, 6 percentage points behind the five-year average of 16%.
Soybean development, on the other hand, was near to slightly ahead of normal last week. Soybeans blooming was estimated at 31%, 7 percentage points ahead of the five-year average of 24%, while soybeans setting pods was estimated at 2%, near the five-year average of 4%.
Looking at the state by state break down Iowa is now 37% in bloom, Minnesota 43% and Nebraska 41%. All these ratings are well ahead of their respective 5 year average.
The national soybean condition rating came in the same as the corn crop: 71% good to excellent nationwide. That was unchanged from the previous week and still well ahead of 53% at the same time last year. Iowa was 84% good to excellent, along with Minnesota 83% , Wisconsin 79% and Nebraska 76% .
Meanwhile, winter wheat harvest moved ahead 15 percentage points last week to reach 56% complete as of Sunday, 1 percentage point ahead of the five-year average of 55%.
Harvest in Kansas in 80% complete, Illinois is 81% and Missouri is at 84% finished,. Nebraska winter wheat is 16% harvested, and South Dakota has not started yet.
Winter wheat condition — for the portion of the crop still in fields — was rated 51% good to excellent, down 1 percentage point from 52% from the previous week. Sixty-one percent of North Dakota’s winter wheat crop was rated good-to-excellent.
View the full report here: https://downloads.usda.library.cornell.edu/usda-esmis/files/8336h188j/c247fd92b/1g05g1123/prog2820.pdf
Clay Patton breaks down the full report here:
Market Recap 7-6
Markets switched to risk on to start the first full week of July. The rally seemed to start overnight with several Chinese media outlets running stories around China’s economic recovery and it being stronger than originally predicted. US traders felt that meant continued economic stimulus for the US economy and started buying. This put significant pressure on the US Dollar down 0.68% at the time of this writing. That did little for emerging currencies though. The Russian Ruble is also 1.88% lower and the Brazilian Real is 0.32% higher.
Dry weather concerns helped to find follow through support for grains on Monday. As much of the corn crop is close to the pollination stage weather will become more of a volatility mixer for the grain markets. Forecasts continue to be dry for the next 2 weeks.
Grains were also boosted on the open with China and Mexico buying corn and soybeans. USDA announced 3 flash sales early Monday. China purchased 264,000 MT of soybeans for the 2019/2020 marketing year. China purchased 202,000 MT for the 2020/2021 marketing year. Mexico purchased 182,880 MT of corn split between the 2020/2021 & 2021/2022 marketing year.
The latest USDA grain export inspections were delayed until early afternoon due to technical difficulties. Overall the report held few surprises. Corn exports fell below a million metric tons. That widens the deficit corn is running with the previous marketing year. Sorghum also fell sharply to just over 50,000 MT. Year to date though sorghum is running almost 3 million metric tons more than a year ago. Soybean exports were strong over 500,000 MT.
Export business for US grains has been decent in 2019/2020. US soybean export commitments are 254.8 million bushels. That is up 180% from a year ago. South American grain exports though continue to grow rather than shrink. Brazil exported a record 505.1 million bushels in June vs. 314.1 million bushels last year. Argentinian and Brazilian FOB corn offers are $4-$15 cheaper per metric ton than US corn at the Gulf.
Livestock opened and stayed higher all day on Monday. Traders are expecting to see a significant increase in Chinese export business. China suspended imports from two more Brazilian meat plants on Monday. The suspension comes over corona virus concerns. Reports indicate that recent mass testing in Brazil revealed more than 1,000 positive corona virus cases at meat plants in Mato Grosso do Sul. Stone X analysts point out that the Chinese government continues to limit the sources of meat that can be imported over fears that the corona virus will be carried into the country on the meat, even though literally tens of thousands of tests of such meat in recent weeks have failed to produce a single positive test result.
Last week’s cash trade trickled in all week. Southern live business had a full range of $91 to $96, mostly $94 to $95, while Northern dressed deals have had a full range of $148 to $155, mostly $153 to $155.
For the week ending June 20, 2020, Imported Beef Passed for Entry in the U.S. totaled 40,086, 103.02% of the previous week and 100.66% of the 4-week average (note June 27 report is not available as of yet).
Expected Slaughter numbers Monday
121,000 hd today 121,000 hd wk ago 119,137 hd yr ago
453,000 hd today 476,000 hd wk ago 483,042 hd yr ago
Midday Carcass Value Monday
Choice dn 0.38 205.06
Select dn 2.27 196.49
C/S Spread 8.57
Carcass up 1.59 68.05
Bellies dn 2.24 89.96
Pre-Opening Market Broker Commentary
Mark Gold, Top Third Ag Marketing, discusses overnight grains and what the trade may see today. China and Mexico are actively in the market Monday morning.
Jerry Stowell, Country Futures, looks at what may impact the livestock futures today. Futures could be mixed as traders look at demand after the 4th of July.
Mike Zuzolo, Global Commodity Analytics, takes a look at the midday trade. Macro and micro market movers are in play at the midday.
John Payne, Daniels Ag Marketing, looks at the grain settlements. The rally is nice, but how long can it hold?
Jack Fenske, York Commodities, looks at the closing market numbers.
Markets turn around…a correction that wasn’t a Tuesday. USDA report out tomorrow. Will see a quick knee jerk reaction to the report & then the report market reaction will mellow out some. Will June report have more weight than the September report? Will the weather & warmth for first part of July be a market issue? Another pressure point has been COVID-19 & its effects on the markets of soybeans.
Commodity markets, including grains, fell in with the risk off sentiment that developed across the entire market complex Friday. Brain Splitt with Ag Marketing.Net weighed in on how rising cases of Covid-19 may impact more than the equity markets.
Energy markets are at risk as states like Texas pause their reopening. That translate to harm for corn demand. Splitt is quick to point out though that there is one demand factor that could be improving for corn and that is feed demand. As DDGS and other feed ration ingredients became more scarce corn filled in more gaps livestock feeders.
China is back in the market for US soybeans on Friday, but their total demand picture is still fuzzy. A weather story would definitely help bean bears, but time for the story to develop is starting to dwindle in Splitt’s opinion.
Listen to the full commentary here:
Overall feel of the markets
How does corn differ from soybeans
June 30th report on Tuesday
Overall movement of livestock-politics & livestock
Name change for INTL FC Stone. China & the growing corn deficit, Army worms-is that a concern for China. Where are we at for Phase One with China…a lot of opposite information. Progression of the winter wheat harvest. How are drought areas dealing with harvest? Early Russian harvest is better then expected. Bayer has a deal with Round-Up & dicamba. Hogs & Pigs report out on Thursday. Update on African Swine Fever