Good morning,
Corn is down 2, soybeans are up 5 and wheat is down 17 to start the day.
Wet and cool weather prevails around the Midwest in the 1–5-day range but does appear to be moving out around the 22nd of August with a hot air mass expected to build by then. Current and forecasted rains will improve crop conditions and potential of both corn and soybeans.
Traders will begin to position for Fridays USDA report which will be interesting. The average trade guesses for Friday’s report is calling for a 2 bpa drop in the national corn yield from 177.5 bpa down 175.5 bpa. Soybean yields are expected to drop almost a bushel from 52 bpa down to 51.3 bpa. No material changes are expected for old crop carryout. While corn production is expected to dip 185 mbu, the carryout is expected to fall less than 100 mbu to 2.168 bln thanks to about 90 mbu of expected demand rationing. Soybean production is expected to dip about 50 mbu while carryout is expected to decline about 30 mbu to 267 mbu.
With US prices still at a significant premium to South American corn prices we are going to be stuck in the sub $5 levels on the CBOT. We would need a major drop in yield to get stocks to a concerning level and that doesn’t appear to be in the cards. Producers should be getting rid of any old crop bushels they have and make new crop sales for bushels they are not able to store.
Have a Safe Day!
Garry Gard
920-348-6844
