This is the SFN Market Report with Brooks Schaffer of Palmetto Grain. Reach him at brooks@palmettograin.com or 843-540-4540.
Weekly closes last week gave us at least a little encouragement to go into the weekend. Unfortunately Monday’s trade took a lot of that away. Wheat was the leader to the downside and in the absence of any threat to the crop, it pulled corn down with it. Soybeans maintained some strength only closing down 1 on old crop and 6 on new crop November. Soybeans were less willing to sell off on optimism of the talks with China happening in London today. The market is not looking for a deal immediately, but progress in the right direction is enough right now. Wheat sold off despite continued escalation in Ukraine. There seems to be almost no chance of peace anytime soon now as both sides continue to score major hits. Russia has stepped up drone and missile attacks but we are not sure if we have seen the retaliation they promised for Ukraine’s strike on the bombers deep inside Russia. USDA is projecting US wheat carryout adequate to surplus at over 900 million bushels but world carryout is still very tight. And the US Plains continue to get hit with excessive rains with wheat near maturity. Spring wheat acres have been hit hard by drought and soft red winter wheat in Ohio has been hit with excessive rain. There seems to be a lot of questions about the currently projected yields but the funds continue to sell until we know more. Wheat typically puts in the seasonal low by the end of June. with the massive fund short, there is hope we have already seen the low.
USDA released the weekly crop progress report Monday at 4pm. Corn conditions were rated at 71% good excellent vs 70% expected and that compares to 69% last week and 74% last year. That is not enough to feed the bulls, but it is also not setting any records. The crop is 97% planted which is right at the 5 year average. Soybean conditions came in at 68% good/excellent which is right what the market was expecting. That compares to 67% last week and 72% last year. Soybean conditions fall below average of recent history, but not low enough to raise alarm bells yet. It is also August weather that makes yield in soybeans, not June. Soybean planting was estimated at 90% complete vs 91% expected. That advanced 6 points from the 84% last week, 86% last year and 88% on average. The pace has slowed down and almost been caught by the average pace. Winter wheat harvest was estimated at 4% complete vs 8% expected. That compares to 3% last week, 11% last year and 7% on average.
We get USDA’s June supply and demand update this week, Thursday June 12th at noon. So i will have the report numbers and market reaction on Friday’s report. Very little will be changed on the new crop side and no major changes are expected for soybeans on the old crop either. The market will be watching for what USDA does to old crop corn demand. We have already reached USDA’s corn export target for the entire marketing year and we still have 3 months left to go. Ethanol grind may be too low as well. The market will see how aggressive USDA is in making adjustments. However much less we carry through the summer, will come off next year’s all important carryout number too.