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06/25/2024 Slippage in Crop Ratings Helps Offset Lofty Expectations for Friday’s Stocks and Planted Acreage Reports

By The Commstock Report
On the Grains Overnight grain trade is steady to weak. Export sales were within the range of expectations. The most noteworthy element in the holiday delayed Commitments of Traders report issued yesterday was that for the first time in 5 weeks funds started reducing their net short position in corn but continued adding aggressively to their net short position in beans. Trade estimates are out for Friday's Quarterly Grain Stocks and the Acreage Report showing what actually got planted vs. March intentions. June 1 Grain Stocks are expected significantly higher, even at the lower end of the ranges of estimates. As for planted acreage, the best spin we can put on expectations is that markets have already dialed in bearish numbers. No switch from corn to beans is expected. Instead, expectations for BOTH crops are higher than March, by more than 300,000 acres in corn and by more than 240,000 acres in beans. Reasonably steady markets overnight despite those numbers likely comes from slippage in crop ratings we got after the close. Looking at corn first, the portion rated good to excellent dropped three points to 69%, just meeting expectations. However, 7% rated poor to very poor and that was…
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06/24/2024 Weekend Flooding in Upper Midwest (and More on the Way) While Hot Temps a Worry in the South

By The Commstock Report
On the Grains Grains are steady to firm in overnight trade with beans firmest. We've not yet seen the wire service roundup of pre-release trade estimates for Friday's Acreage Report but expect them to show most expecting a slight shift from corn to beans since March Planting Intentions. The more immediate news is weekend weather where heavy weekend rains have led to flooding and more super-saturated fields across much of SE South Dakota, southern Minnesota and Northwest Iowa. This area has experienced from 6 to 15 inches of rain in the past 10 days! The 3-5 day outlook shows a bit of respite, but then the 6-10 day outlook shows yet another huge front bringing abundant rainfall to the northern half of the Corn Belt and the Lake states where it could well do more harm than good. Meanwhile, the hotter than normal temps persist across most of the country in both the 3-5 day and 6-10 outlook. As we noted last week, the hot temps are particularly worrisome in the Delta and Southern States where corn has already entered the temperature-sensitive silking and pollination stage. This morning we'll get weekly export inspections and this afternoon we'll get the holiday-delayed Commitments of…
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06/21/2024 New 3-Month Weather Outlook Makes Bumper Crops Far From Certain

By The Commstock Report
On the Grains Happy Summer Solstice! It's hard to believe the days are already going to start getting shorter. Grains are recovering some in overnight trade after yesterday's beat-down on better rain chances for the Eastern Corn Belt in the 8- 14-day outlook. It took December corn to the lowest close in three months and November beans to the lowest close in three years. The sell-off in wheat has been unrelenting after reports, despite lower Russian production forecasts, they're back to their old ways of lowering bids until someone buys and had just lowered their export prices another $12 per tonne after telling the world two weeks ago they'd likely be raising their prices due to falling yield prospects. Overnight firmness, may be the result of weather forecast "whiplash." That's because yesterday afternoon the NWS issued its new 30-day outlook and it shows nearly the entire Corn Belt to be hotter and drier than normal. Further, the Climate Prediction Center issued its new long-term forecasts for July through September and sure enough, it portends a challenging growing season. Looking first at the 3-month temperature outlook, the whole country is going to stay hotter than normal except for the Pacific Coast…
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06/20/2024 Weather Outlook Still Seen “Mostly” Benign – But Today’s New 3-Month Outlook Could Tell a Different Story

By The Commstock Report
On the Grains Grains are all lower in overnight trade, with wheat leading the losses. Wheat has been lower in 14 of the last 16 sessions on heavy harvest pressure and better than expected yields for HRW. Now we're getting yield reports for SRW as well which are coming in much higher than average and casting doubt on USDA's last estimate for that class as being too low. The short-term weather outlook is very hot over most of the country with additional intermittent rain for the Western Corn Belt but less likely for the Eastern Corn Belt. So far, the markets read it as benign. Today we'll get an update on the 3-month outlook from Climate Prediction Center but it's not out yet as of press time. With La Nina conditions settling in we could well see increased odds of stress through mid- to late summer. What we do have is an update of the 8- to 14-day outlook yesterday. It shows hot temperatures to continue over most of the country right into early July, but accompanied by above-normal precipitation over the nation's midsection and normal elsewhere. Due to the holiday yesterday we won't get weekly export sales until tomorrow.…
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06/18/2024 Crop Condition Ratings Slip a Bit, Even in the “Wet” States

By The Commstock Report
On the Grains NOTE: Markets will be closed tomorrow to mark the Juneteenth holiday. They will reopen Wednesday evening at 7 pm. This report will resume Thursday morning. Markets are mixed in overnight trade. As of 6am corn and soybeans are rebounding modestly from Monday losses while wheat continues to weaken on aggressive harvest pace and strong yields. After the close we got the weekly Crop Progress report with a few surprises. Looking at corn first, the portion rated good-to-excellent dropped two points to 72% vs. 73% expected. But it's still way better than last year's 55% and the best ratings for this point in 6 years. Only 5% rated poor to very poor, the same as last week and still well under last year 12%. Emergence came in at 93%, down 2 points from last year but a point ahead of the 5-year average. On a state-by-state basis it's noteworthy that 10 of the top 18 producing states saw declining conditions while only 6 saw improvement and two were unchanged. What's also noteworthy is that the Lake states were among those with declining ratings even though they've had abundant rainfall and apparently too much. The second set of ratings for…
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06/17/2024 Traders Jumping the Gun in Reading Weather Outlook Bearish?

By The Commstock Report
On the Grains Grains are all lower in overnight trade as markets are reading the short-term weather outlook bearishly. The new 6-10 day outlook issued yesterday shows the whole country to be warmer to much warmer than normal with Eastern Corn Belt temps likely 10-15 degrees above normal. However, they also show above to much above normal rainfall over two-thirds of the country so the trade is reading that as “near jungle-like” conditions now that most of the country’s soil moisture levels are adequate to surplus. This content is for members only.Log In Register
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06/14/2024 Weather and Geopolitics Could Make for a Frothy Outlook in Weeks Ahead

By The Commstock Report
On the Grains Corn and beans are giving back part of yesterday’s gains in overnight trade, with wheat continuing its weaker tone on seasonal harvest pressure. Harvest of SRW is picking up as well, and unlike HRW, test weights are falling short of lofty expectations due to too much rain this spring. It didn’t help that weekly export inspections for new crop wheat fell below the low end of the range of expectations. Export sales for corn and soybeans were fair, falling right in the middle of the respective ranges of expectations with China the top buyer in beans. Soybeans got further support yesterday from the latest report from CONAB, its counterpart in Brazil, making a mockery of USDA’s puny 1 MMT reduction in its estimate for the Brazilian crop to 153 MMT. CONAB lowered its own estimate another 300,000 tonnes to just 147.3 million. And as Matthew Kruse noted in yesterday’s blog on the Commstock Channel, CONAB’s numbers are more credible because Brazil’s exports in April-May, normally their peak months, are down 2 million tonnes from last year. As for corn, CONAB raised its estimate by 2.5 MMT, but only to 114.1 million, which is still far below USDA’s…
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06/13/2024 Non-Event WASDE Dialed In; Crop Ratings Again the Key Driver Going Forward

By The Commstock Report
On the Grains Grains are mixed in overnight trade thus far. As of 6am corn and wheat were firm with soybeans weak. As it turns out yesterday’s WASDE had few changes from May and proved little more than a “placeholder” for the July report after USDA gets a look at the June Acreage report and more evidence from actual yield results on South American crops.   Ending stocks at the global level were lower for corn, wheat and soybeans but no more than expected. As for South America, they didn’t lower corn estimates for Brazil or Argentina at all. They left Argentina’s soybean estimate unchanged and only cut 1 million tonnes from their Brazilian estimate, far shy of the 2.7 MMT cut expected.   They did cut the wheat crop estimates for Russia and Ukraine by 6.5 MMT total and their combined exports by 5 million, however – in open defiance of Russian claims their crop losses to drought and frost will have no impact on exports. Wheat futures tumbled anyway, even though USDA did cut U.S. ending stocks slightly instead of the slight increase expected and raised the average farm price forecast by 50 cents (to 6.50) from last…
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06/12/2024 Grains Mixed Ahead of Today’s Reports with a Few Wildcards in Trade Expectations

By The Commstock Report
On the Grains Grains are mixed in overnight trade heading into the June Crop Report and WASDE updates due at 11am. As of 6am corn and beans are firm but wheat prices are soft. Corn is getting support from growing expectations that the June 28 Acreage Report may show fewer planted acres than March intentions. Even though there's also expectations bean acreage could be higher, beans are getting support from a second flash sale of beans to China yesterday and ideas that Brazilian plans to tax bean exports more severely has put U.S. beans in competition for their business again. Turning to expectations for today's changes in the new crop corn ending stocks outlook for the U.S. the average estimate is for very little change from last month but a very wide 415 million bu. range among those estimates. The "swing factor" is a combination of expectations for changes in old crop ending stocks and whether or not USDA might pare back its yield estimate for new crop. Worth noting is that there are actually two sets of trade estimates, one for where analysts expect us to end up and the other for what they actually expect from USDA this…
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06/11/2024 Grains Mixed as Trade Absorbs Mixed Results from Crop Progress Report

By The Commstock Report
On the Grains Grains are mixed in early trade. As of 6am all were a few cents either side of unchanged. Yesterday's action was remarkable and encouraging only in the sense that both corn and beans managed to close higher and not be dragged down by the freefall we're seeing in wheat. The latter was blindsided by the sudden withdrawal of Turkey from imports for four months. They not only accounted for 20% of Russia's exports but 22% of Ukraine's wheat exports as well and basically neutralized the market impact of falling crop estimates for both those countries. After the close we got the weekly Crop Progress report with the second set of crop ratings for corn and spring wheat and the initial set for soybeans. Looking at corn first, the portion rated good-to-excellent dropped a point, to 74%, but pretty much matching expectations and 13 points over last year. Just 5% rated poor to very poor, up a point from last week but still less than last year at 8% P/VP. Corn emerged is at 85%, a point better than average but 6 points behind last year. Planting progress came in at 95%, a point lower than expected but…
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