- Chicago corn and soy futures have fallen on a cooler midday GFS weather forecast, while wheat finds support amid ongoing disappointing Russian yields. Further reductions to Russia’s crop lie ahead, and another week of falling winter wheat yield there has put a floor under US and European wheat markets. US wheat export sales were also much better than anticipated. Russia’s cumulative wheat yield now stands at 3.72 mt/ha, vs. 3.83 mt/ha at the same point in harvest a year ago. Recall USDA maintains a final Russian wheat yield marginally above last year. This week’s data points to total Russian wheat crop size closer to 72 million mt, vs. USDA’s 74.2. However, Ukrainian yields continue to improve. The cumulative Ukrainian wheat yield has risen to 3.85, vs. 3.42 in late July a year ago. Using increased yield data, we peg combined Russian/Ukrainian wheat production at 101.5 million mt, vs. USDA’s 103.2 and vs. 96.7 in 2018/19.
- US wheat export sales through the week ending July 18 totalled 24 million bu, vs. 13 million last week and the largest since March. Enlarged purchases were made by traditional buyers rather than non-traditional buyers. Yet, US wheat sales last week were well above the pace needed to meet the USDA’s forecast.
- Weekly US corn sales totalled a meagre 5 million bu, vs. 8 million the previous week. A pace of 20 million per week is needed to meet USDA projections. Final US old crop exports will be 2,025-2,050 million bu, vs. USDA’s 2,100 million. Following recent lower ethanol production, this 25-50 million bu will be put into US corn end stocks. Net cancellations of 2.9 million bu were recorded for soybeans.
- For their respective crop years to date, the US has sold 1,958 million bu of corn, down 16% from last year, 1,788 million bu of beans, down 16%, and 313 million bu of wheat, up 25% from a year ago.
- One cargo of beans was sold to a private Chinese crusher last night for delivery in October. There are rumours of 2-3 additional cargoes purchased by Chinese state-owned buyers. Recall China has committed to allowing 2-3 million mt of US beans into China tariff-free.
- Some details of this year’s MFP are beginning to trickle out. Estimates are circling that peg per-acre payments across IA, IL, IN and OH at $55-90. We suspect that this includes total MFP payments rather than the first tranche due in August. Ag Secretary Sonny Perdue is scheduled to release additional details by the end of the week. Signup starts next Monday.
- The midday Central US GFS weather forecast is drier in IL and IA than this morning’s run but maintains cool temperatures into August 10. GFS output is broadly favourable, compared to the EU model, as it keeps mean position of strong high pressure ridging confined to the Western US. Cooler air will be allowed to flow across the Northern Plains throughout the period. Moderate to heavy showers will move across most of the Corn Belt next Mon-Wed. Total in excess of 0.50” will favour IA, MN, WI and far northern IL. Heavy showers impact the Central Plains Aug 5-8.
- The Central US weather forecast into mid-August is neither wet enough for the bears nor dry/hot enough for the bulls. Based on volume, the market is simply waiting on NASS’s Aug report to make the next major move. US demand will continue to wane on higher prices.