Corn is up slightly this morning with technical indicators turning bullish and weather forecasts having some uncertainty in the 10-14 day range. Weather models agree that the 10 day forecasts show above average rainfall and moderate temperatures. Look for the risk premium that is currently in the market to hold until we get agreement on the 10-14 day outlook.
Yesterday morning China offered to purchase nearly $70 billion of US farm and energy products over a year if the Trump administration abandons threatened tariffs according to trade officials.
President Trump rejected an RFS deal allowing ethanol that is exported to be eligible for biofuel credits and allowing E-15 sales year round.
Summer weather is everything when it comes to final yield for corn. Rainfall and temperatures in June are a good preamble to Julys weather, which is the biggest driver of corn yield Long term studies indicate the weather in July is twice as important as June weather. With ample moisture and ideal temperatures in May and the start of June we have corn conditions close to all-time highs in the US. Below is a chart of the best week 21 Good/Excellent Corn condition ratings in the last 20 years. Note that a 178 yield in the US could offset any concerns arising about corn production around the world. With the potential for corn acres to be higher in the June 29th report this would reduce the concern even more.
Year G/E Rating in WK 21 Percent of Trend
2018 79 ?? 2018 trend + 178 bpa
2015 74 102.6
2010 76 100
2007 78 101.5
1999 75 99.5
There is a lot of growing season left, but we are currently off to one of the best starts in history. If weather remains adequate we could be looking at record crops for the third year in a row. Is your marketing plan prepared for prices we have seen the last couple years if carryout remains high? Historically the best prices received by producers are sales that are made 4-6 months in advance of the delivery timeframe. Give your buyer a call today to get caught up on sales and put offers in for the coming year.
Have a Safe Day!