This is the SFN Market Report with Brooks Schaffer of Palmetto Grain. Reach him at brooks@palmettograin.com or 843-540-4540.
We did not see a lot of new news last week to move the needle. The weather was trending more threatening with a prolonged heatwave with unusually warm nights forecast for much of the central US. Most areas have received ample moisture to handle some heat but any areas that missed out are going to go backward quickly. The funds have been piling on the short side since late winter with nothing spooking them to cover. Many have big profits in the short positions so this was enough to trigger some profit taking. There is also some talk of pollination issues scattered in the Midwest. It is being called tassel whip and is the new buzzword for 2025 corn production. It seems to be varietal specific and we do not have a good handle on how widespread it is. A lot is riding on how long the heat dome stays and its exact positioning. There will be intense storms riding the edges of the dome and delivering hail, damaging winds and flooding rains.
Before we get all bulled up here, we still have a big crop coming. It is going to take something very dramatic to threaten to push yield too much below trend. BUT the funds have been pricing in bigger and bigger crops. This was a reminder that the crop is not made until its in the bin and we still have some time left. Pollination is a very important part of yield but grain fill is important too. A 5 or 10 percent swing in yield will make a huge difference to the balance sheet this year.
Corn conditions were unchanged from last week as expected at 74% good/excellent. That compares to 67% last year. Analysts expected soybeans to improve a few points but they were down 2 points from last week at 68% good/excellent. The trade was expecting 71% good/excellent. 68% is the same as we were this week last year. The crop ratings are still above average but the market is going to be looking very closely over the next few weeks to see what the heat has done to conditions. We will also be watching the forecasts very closely. The forecast models are run several times per day and the market will rush to price in each new update and try to guess the trend. We still desperately need some trade deals and more clarification on biofuel policy. Otherwise we are going to live and die by the weather model runs, and that could be very volatile.