In the Gospel of Matthew we are instructed, “one who lives by the sword, dies by the sword.” For some commodity traders that could be paraphrased to “one who trades on the weather, dies on the weather”, and yesterday for the bulls in the corn market that had purchased on the belief that conditions were going to remain problematic, suffered a painful death. In what appears to be a classic case of gap and go, corn experienced one of the harshest down sessions since March. The wheat market was not far behind and beans, while lower, actually bounced quite well from the session lows.
A solid export inspection papers to have aided the bean market. For the week ending July 16th we shipped 11.26 million bushels of beans bringing the marketing year total up to 1.765 billion bushels. This number is 13% above a year ago at this date and only 40 million bushels shy of the USDA target for the year with 7 weeks to go in the marketing year. Corn inspections were not bad at 45.72 million bushels, bring the year to date tally up to 1.539 billion bushels. There will be other adjustments but with the number we still have 311 million bushels to export to meet the USDA targets and with 7 weeks to go that means the average will need to hold around 44.4 million per week. Note the year to date we are running 4.7% behind last year and the USDA projects that will be down 3.5%. Wheat inspections were 80% above the previous week at 17.97 million bushels.
There were no surprises in the weekly conditions/progress reports. Corn good/excellent remained unchanged at 6(% (Note, there was actually a slight improvement there as 2% moved into excellent). Corn silking increased 28% to 55% which is basically on pace with historical norms. As you would suspect states with the lowest rating are to the east and south. The good/excellent ranking for Indiana is 45%, Missouri at 50%, North Caroline 49%, and Ohio 46%. Soybean conditions were also unchanged at 62% good/excellent and we have 56% of the plants blooming, which is right on the historical norm and 17% setting pods, also right at the average for this date. Keep in mind that we will have to wait at least until the August report to see what the USDA does with the acreage numbers. Winter wheat harvest is now 75% complete and ratings for spring wheat slipped 1% but remain solid at 70% good/excellent.
Prices did try and rebound a bit in the overnight hours but with what appears to be a near ideal weather forecast for the balance of the month, it is difficult to believe that will gain much traction. Outside markets are mixed as energies are a smidge higher, metals again under pressure but the dollar is soft as well. We imagine the other than temporary bumps higher, prices should generally remain in a defensive posture through the balance of the month at which time, focus should begin to return to crop estimates and the August report.
**The views expressed above are entirely those of the author.