- Midday comments:
- A calmer Black Sea and weaker corn pressured wheat although some slightly supportive data from the weekly crop condition report countered the pressure. Spring wheat at 68% good/excellent was 2% below last week, and the ten year average is also at 68%. Harvest in the US is reported to be 17% complete compared with the ten year average of 42%. Some additional support came from reports that as much as 15% of the Ukraine wheat crop could be lost due to fighting although this is unconfirmed at present.
- Last night’s follow through selling has been seen as a bearish development and “finishing” weather is being deemed as more important than current crop condition. The 1% downtick in good/excellent crop condition to 72% is minor support, if indeed it is support at all. The ten year average good/excellent rating stands at 59% highlighting just how good this crop is currently looking.
- Last night’s good/excellent crop ratings saw a 1% improvement to 71% which bodes well for a resumption of the longer term price downtrend to resume, aided by further bearish weather reports which could see a further improvement in next week’s ratings update. This could be enough to put a lid on market upside and see potentially new contract lows in the offing. The ten year good/excellent crop rating average stands at 58%, (as with corn) highlighting how good the current crop really is.
- Evening update:
- Wheat markets in both the US and EU have uncovered some short covering and prices have established some support as a consequence. Ukraine’s flour millers have requested a suspension of milling wheat exports until such time as crop quality can be fully assessed. It is noted that such requests are made at this time most years, and as such little importance should be attributed to the story, rather it should be viewed as an attempt to establish favourable domestic prices for millers and exporters alike. The net fund short in the Chicago market appears to have swallowed the story once again and taken a degree of cover!
- Australian weather in recent days as well as the near term forecast has been described as “incredibly helpful”. Victoria and New South wales have additional rains forecast for the remainder of August into mid-September.
- The German wheat crop has received an upgrade by the German Farmers Association (DBV) to 26.2 million mt from 24.6 million mt year on year. Their estimate of rapeseed output was also raised by 100,000 mt to 5.8 million mt.
- The ProFarmer crop tour reported an increased corn yield in Ohio at 182.11 bu/acre compared with last year’s 171.64 bu/acre and the three year average of 146.13 bu/acre. S Dakota yield was placed at 152.71 bu/acre, below last year’s 161.75 bu/acre but well above the three year average of 125.7 bu/acre. Soybean pod counts in Ohio reached 1,340 per 3’ x 3’ area, compared with 1,280 last year and above the there year average of 1,190. Pod counts in S Dakota were 1,057, up from last year’s 1,016 and above the there year average of 900. How accurate is the tour? For corn, at times it is spot on but 2012 was a big miss and statistically there is a 1.45% variance between to tour’s figure and the NASS September yield figure. Compared with final US outturn the tour is expected to be within 3.5% or 5.2 bu/acre. Soybean history is similar to corn, tour yield is expected to be within 1.5% of NASS September figures and within 6% of final yield. However, the market watches the tour avidly, and debates its findings enthusiastically.