Markets Sag on Crop Ratings

Aug 29, 6:57 am | Morning Commentary | Share this:

AgResource Daily Farm Marketing Advice for Tuesday: 1/ No new advice.    

6:30 AM CDT CBOT Prices: Nov soybeans are down 5.75 cents at $9.355, Dec corn is down 2.75 cents at $3.4825 while Dec Chi wheat is down 4.0 cents at $4.24.

Good Morning! Grain and soy futures this AM are weaker, again in moderate volume, following better soy crop ratings in NASS’s weekly release, and as the EU and GFS models are a bit warmer across the Northern Plains and Upper Midwest in the first 10 days of September. 28,000 contracts of Dec corn, 14,500 contracts of Nov beans and 8,000 contracts of Dec CME wheat changed hands so far. Crude is up .10/barrel, EU milling wheat futures have followed the US to modest losses, Malaysian palm oil is down 25 ringgits and the US dollar is down sharply again, posting yet new lows for the move.  

  Bean GD/EX ratings through last Sunday improved 1%, with conditions-based yield models also marginally higher, and the general consensus seems to have centered on a corn yield of 165-168 Bu/Acre and bean yield of 47-49 Bu/Acre, which is up slightly from trade guesses in late July/early August. The US will no doubt avoid major losses, save for some areas of the Plains, amid relatively improved growing conditions in August.

  Still, we caution that the risk of below normal temps in September is intact, and the Delta’s forecast remains rather wet into early next week.

  The remnants of hurricane Harvey will travel northwards in the next 4-5 days, tracing a path along the MS River. Rainfall accumulation through Sat/Sun is projected as high as 5-9” in LA, AR, MS, W TN and far W KY. Quality issues will be only regional, but a fairly lengthy delay in harvesting there is anticipated. Just 25% of beans in AR were gathered as of Sunday.

  The remainder of the Central US will be dry and cool throughout the next 10 days. Overnight lows are pegged in the 40s across the Dakotas, MN and WI Sep 5-8 (with a few days in the upper 30s across Southern Canada) but a hard frost is so far not indicated. A slight warming of temps is forecast thereafter.

  Serbia on Monday cuts its corn crop estimate 3.5 MMTs (nearly 50%) to just 4.5 MMTs. This by itself is not overly newsworthy, but neighboring countries Romania, Bulgaria and Ukraine have experienced very similar growing conditions since early summer. Rainfall in Ukraine since July 1st rests at just 15-80% of normal, with much of E Ukraine seeing just 15-30%. Ukraine’s cash corn market shows no sign of major changes in crop size, but neither is Ukrainian corn overly cheap compared to US origin.

  South American basis levels continue to inch higher, with Argentine corn now offered 40 cents over futures for nearby arrival (vs. negative basis just weeks ago). Brazilian corn is still offered at parity with US origin. Argentine soy basis also continues to rise, with very few soy offers noted in South American beyond October. The US will return as the world’s dominant soy exporter in early autumn through Feb/Mar of 2018. 

  Egypt is seeking wheat for early Oct shipment, but otherwise news is lacking – and enthusiasm from both the bulls and the bears will be lacking until NASS’s Sep crop report.