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By: Dan Hueber –

Regardless of the fact that it will be wrapped with reservations and some controversy, the topic du jour is the July production and supply/demand reports that will be released later this morning.  Once the “word of gov.” has been proclaimed, will it shock the market with another surprise?  In a year that is already crowded with uncertainty, the possibility certainly exists, but we can hope that will not be the case.  Once again, here are trade estimates; U.S. corn production is expected to total 13.62 billion bushels, derived from a yield of 164.9 bpa.  Soybeans production is pegged at 3.874 billion from a yield of 48.55 bpa.  Total wheat production is expected to tally 1.908 billion bushels.  2018/19 domestic ending stocks for corn are expected to be 2.200 billion bushels and beans at 1.050 billion.  Then for the 2019/20 crop year, 1.678 billion corn, 821 million beans, and 1.041 billion wheat. World ending stocks for corn are estimated to come in at 291.79 MT, beans at 109.73 MMT and wheat 292.21 MMT.

Strategie Grains has already issued updated projections for EU crops this morning.  They now look for total soft wheat production to come in at 140.6 MMT, compared with last month’s estimate of 142.8. Durum wheat is projected at 7.8 MMT, up slightly from the June estimate of 7.7. Barley production was trimmed 300,000 MT to a total of 59.6 MMT and corn production with cut 700,000 MT to 62.7 MMT.  Obviously, the excessively hot summer in Europe has taken its toll.

In points farther east, the Russian Ag Ministry is forecasting total grain exports of 45 MMT for the 2019/2020 crop year, which would be an increase of 1.7 MMT over last.  Then in China, the Ag Ministry has trimmed the projected corn usage there by 2 MMT due to the, still ongoing African Swine Fever epidemic.

Equity markets continue to remain giddy over the comments made by Fed Chairman Powell to Congress yesterday and are flirting with a push into new record-high territory.  Conversely, traders in the U.S. Dollar appear to recognize lower interest rates are probably not dollar-positive, and we have seen the first substantial washout in that market in three weeks.

Finally, we have witnessed a rebound of sorts in the corn export sales, but the same cannot be said of beans.  For the week ending July 4th, we sold 505,400 MT or 19.9 million bushels of corn.  The trade was expecting something between 200k and 650k.  Japan was the top purchaser with 444.8k MT, followed by Colombia at 84.8k and then Mexico taking 33.2k.  Tempering this a bit though were cancelations for the 2019/20 crop year where there was a net reduction of 108.4k MT.  China was in for a few more beans last week, purchasing 127,800 MT, but had they not been there, sales would have been non-existent.  The grand total for the week was 132,200 MT or 4.86 million bushels.  In addition to China, there were sales of 68.9k MT to Indonesia and 67.9k to the Netherlands but cancelations of 348.7k MT from unknown destinations. Wheat sales come though about in the middle of expectations at 284,400 MT or 10.45 million bushels.  The Philippines took the top spot with purchases of 123.7k MT, followed by Mexico at 65.2k and then Thailand with 55k.

It will certainly be nice to have the July reports behind us and then we can begin to speculate as to what the new acreage survey will unveil for next month.

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