August 21, 2023
Good morning,
Markets are up 3 in corn, up 22 in beans and down 5 in wheat to start the week on forecast for hot and dry weather as Pro Farmer begins their tour this week.
The 10-day forecast is hot and dry and extreme heat is forecast into the beginning of September with another ridge developing. This forecast has the soybean markets strengthening but has not spilled over into corn to the same degree. With an already tight balance sheet, very little wiggle room exists for the oilseed to lose production without prices having to ration further demand. This afternoon’s crop progress reports should show steady to improved ratings vs. last week, but how much will yield potential be dinged over the next two weeks of hot/dry weather?
This year’s Pro Farmer tour kicks off today and goes through Thursday. Last year the markets rallied during this tour as poor yields and trouble areas were identified. It will be interesting to see what they find when they step into the fields this year. In the last 10 years, the Pro Farmer yield estimates for corn were below the USDA 8 times by an average of 4.5 bushels.
Friday afternoon’s USDA Cattle on Feed Report showed all U.S. cattle on feed as of August 1 at 11.030 million head, or 97.7% of last year; that was below the average trade estimate at 98.3% of last year. July cattle placements came in at 91.7% of LY, below the 94.5% guess, with July marketings at 94.7% of LY, a tick below the 94.8% expectation.
Have a Safe Day!
Garry Gard
920-348-6844
August 18, 2023
Good morning,
Markets higher to start the day with corn up 5, soybeans up 14 and wheat up 15.
Hot dry weather is forecast next week as Pro Farmer starts their tour of the Midwest. Pro Famer’s estimates of yield generally trend with the USDA but have missed yield considerably as they use average ear weights in their final formulation. Soybeans estimates are similar as it matters how large or small final seed sizes are.
The first container ship (which carried at least some grain) to leave Ukraine’s Odesa port post-Black Sea deal has safely reached the Istanbul strait today. Turkey’s Defense Ministry announced plans to restore a Black Sea grain corridor without Russia’s agreement, in addition to alternative routes that have been developed and aided by neighboring countries. Romania’s Prime Minister said he’s looking for 60% of Ukraine grain exports to move through Romania, though he said the doubling of grain capacity through the country is an “ambitious target”.
The forecast is hot and dry to finish out the month of August. The strongest dome this summer sets up next week and remains above average temperatures on the 15-day model run. The dome pushes rain up into Northern Canada and into the far western US.
Have a Safe Day!
Garry Gard
920-348-6844
August 15, 2023
Good morning,
All commodities are lower to start the day with corn down 9, soybeans down 9 and wheat down 17.
Corn condition ratings rose two points this week to 59% good/ excellent, up from 57% last year but below the 63% five-year average figure; corn progress metrics remained roughly at or ahead of comparables at 96% silked, 65% doughed, and 18% denting.
Soybean ratings jumped five points to 59% g/ex, now up from 58% LY but behind the 61% 5YA; soybean blooming and pod-setting remained ahead of comparables at 94% and 78%, respectively.
Pro Farmer starts their tour of the Midwest next week, just as the hot weather spreads across the US. The markets seem to have some weather fatigue as the longer-term forecast has turned bullish and prices really have not. Prices historically bottom in August and head higher from here, but we need to see some change in demand to move them much higher.
Have a Safe Day!
Garry Gard
920-348-6844
August 10, 2023
Good morning,
Corn is up 3 and soybeans are up 13 to start the day with a ridge in the forecast and continued conflict in Ukraine.
Ukraine announced a “humanitarian corridor” on Thursday to let dozens of cargo ships trapped in its ports since the outbreak of war last year sail into the Black Sea, where shipping routes are under scrutiny since Russia quit a deal to allow grain exports. At least initially, the corridor appears to apply to vessels such as container ships that have been stuck in Ukrainian ports since the Feb. 2022 invasion and were not covered by the deal that opened the ports for grain shipments last year.
The Ridge setting up in Texas pushing heat up North is causing a major shift in what the models look like this morning. The rain is getting pushed up into the Northeast, which is the opposite of yesterday. This makes sense and would verify that this ridge will develop.
Look for the markets to chop sideways today with the USDA crop report out tomorrow. Early estimates do not look for any big changes although the August report often has them.
Have a Safe Day!
Garry Gard
920-348-6844
August 9, 2023
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
