Weekend Rains Ease Yield Loss Fears

Good Morning from Allendale, Inc. with the early morning commentary for July 13, 2020.

Grain Markets continued sliding lower as scattered rains across key growing regions over the weekend improved prospects for drought-hit crops and easing fears about potential yield losses.  Traders will pay close attention to weather forecasts this week as this season’s corn crop enters a key development stage.

Last week, September corn futures were down 7.25 cents, August soybeans were down 4.25 cents, September wheat up 43.25 cents, September soymeal was down 3.80 and September soyoil was up 10 points.

USDA Weekly Crop Progress Report will be released this afternoon at 3 p.m. CDT.  Trade is expecting corn crop conditions to decline 2-3% to 69% GTE (71% last week, 72% average).  Soybean crop conditions expected to decline 1-2% to 69% GTE (70% last week, 70% average).

WASDE Old Crop Grain Ending Stocks showed corn ending stocks at 2.248 billion bushels (2.287 bil. bu. estimated, 2.103 bil. last report, 2.221 bil. last year), old crop soybean ending stocks at 620 million bushels (588 mil. bu. estimated, 585 mil. last report, 909 mil. last year).

WASDE New Crop Grain Ending Stocks showed corn ending stocks at 2.648 billion bushels (2.715 bil. bu. estimated, 3.323 bil. last report, 2.248 bil. last year); new crop soybean ending stocks at 425 million bushels (424 mil. bu. estimated, 395 mil. last report, 620 mil. last year); new crop wheat ending stocks at 942 million bushels (954 mil. bu. estimated, 925 mil. last report and 1.044 bil. bu. last year).

WASDE U.S. Crop Production estimates showed new crop corn production at 15.000 billion bushels (15.065 bil. bu. estimated, 15.995 bil. last report and 13.617 bil. last year).  Corn yields seen at 178.5 bushels per acre (178.6 bpa estimated, 178.5 bpa last report, 167.4 bpa last year).  New crop soybean production seen at 4.135 billion bushels (4.157 bil. bu. estimated, 4.125 last report, 3.552 bil. last year).  Soybean yields seen at 49.8 bushels per acre (50.1 bpa estimated, 49.8 bpa last report and 47.4 bpa last year).

CFTC Commitments of Traders report showed funds new net position short -141,741 corn contracts, long +99,243 soybean contracts, short -33,529 wheat contracts, long +22,908 live cattle contracts and long +6,635 lean hog contracts.

Private exporters reported large export sales on Friday to the USDA of 1,365,000 metric tons of corn for delivery to China, 765,000 tons of old crop and 600,000 tons of new crop.  They also reported 264,000 metric tons of old crop soybeans to China.  190,000 tons of new crop hard red spring wheat to China and 130,000 tons of new crop hard red winter wheat to China.

USDA added back another 260 million lbs. of beef to the 2020 beef production forecast (now at 26.934 billion lbs).  “The beef production forecast is raised primarily on higher cattle slaughter and heavier carcass weights,” according to USDA spokesperson.  USDA’s current 2020 production estimate is far below the 27.700 billion estimated in March (before the coronavirus pandemic).

Dressed beef values were mixed with choice up 0.91 and select down 0.54. The Feeder cattle index is 134.92.  Pork cut-out values were up 1.83.

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