This is the SFN Market Report with Brooks Schaffer of Palmetto Grain. Reach him at brooks@palmettograin.com or 843-540-4540.
Last week, we got the August WASDE report to trade. This week, we will all be watching the Pro Farmer Crop Tour as they move across the Midwest. Monday’s trade got the week started off with a bullish boost. Over the weekend, Russia and Ukraine continued to hit grain infrastructure, but until we start seeing U.S. wheat exports pick up, the market has grown a bit fatigued by those headlines, as evidenced by Chicago wheat closing unchanged on Monday after the headlines over the weekend and corn closing up 6 cents.
The U.S. corn and bean crops have been through a lot this summer, and the first day of both legs of the Pro Farmer Crop Tour showed plenty of evidence of the challenges. The western belt has been through a lot of dry weather and heat. The eastern belt is now getting pounded by too much water. There were lots of comments and pictures on social media of the tour participants having to walk through standing water. There were plenty of pictures from the western belt showing pollination issues from the heat and dry weather. Scouts have noted how far behind the crop is in many areas. The last few years, much of the Midwest finished the growing season prematurely due to dry weather. This year, too much rain may end it.
The tour has two legs. One starts in western Ohio, then moves across Indiana, Illinois, eastern Iowa and into southern Minnesota for the final stop Thursday night. The western leg starts in southern South Dakota, then moves through eastern Nebraska, western Iowa and meets the other leg in southern Minnesota on the final night. The tour releases yield estimates for individual states at each evening meeting based only on the yield samples taken. The eastern leg gives estimates for Ohio, Indiana, Illinois and Iowa. The western tour releases yields for South Dakota, Nebraska, western Iowa and Minnesota. On Friday after the market close, Pro Farmer releases its national yield estimates based not just on what the tour observed but also crop maturity, soil moisture, disease and prospects outside the tour area. As of this recording, the estimates were not available yet for the first day of the tour, but based on the market trade on Monday watching the tour, it should be an exciting week.
In addition to the tour, we are also still seeing near-daily Chinese purchases of soybeans as we get closer to Xi’s visit to Washington in late September. NOPA crush came out on Monday as well, lower than expectations, but soybean oil stocks were much lower than expectations as well. They were the lowest in 22 years, despite new records being set for domestic crush.
Buckle up; it should be a volatile week. Get orders working in the market!