Cornbelt Update Market Insight July 28th 2015

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Click to View - Corn Prices

Click to View – Corn Prices

Corn prices. Improved weather prospects, stability in weekly crop ratings, and concerns about export demand were major dynamics rippling through the corn market in the past week. Corn lost 11¢ on Friday and 30¢ for the week. Dec corn appears to have stopped Friday at the halfway point on the July rally, but it went through that level without hesitation. Technicians are uncertain if the market wants to make new lows or whether it is finished retracing the rally before USDA’s next crop report on August 12. That report will have the first objective results from enumerators walk through thousands of fields to capture yield data. The August 1 report will adjust yields from the trend estimates released in February. The market expects it to drop from the 168 bu. projection, but it may not be enough to move corn prices higher. The price drop brought a halt to farmer sales, since the retracement has taken prices down below breakeven levels for most farmers. However that has caused prices to firm as the grain flow stopped. Export sales in the last reporting week were 9 mil. old crop and 12 mil. new crop bushels. That was a marketing year low for the old crop sales. However, a 12-week high in corn shipments occurred with a 46 mil. bu. week. Exporters typically ship 84% of final shipments by this point in the year, which matches the pace set last year as well. And they are very close to that this year with 83% of the projected target. China provided some help for jumping in to make a purchase of US corn and its products. Chinese buyers turn to cheaper imported corn and substitutes amid weak domestic demand for Chinese corn, which means the government will be left with huge inventories late in the year before the harvest; China’s corn, sorghum and distiller’s grain (DDGS) imports all hit record highs in June, while barley imports were the second highest ever.

1) Sep 15 corn closed at $4.2025, down 9.75¢ for the day, and down 14.5¢ for the week.
2) Dec 15 corn closed at $4.31, down 10¢ for the day, and down 13.75¢ for the week.

Click to View - Soybean Prices

Click to View – Soybean Prices

Soybean prices. Weather more conducive to good crop development, along with better crop ratings, soft export demand, and soybean imports by US livestock feeders all helped paint a negative picture for the soybean market last week. While market bulls point to fewer acres and more ponds, it also suggests that without more weather problems going forward prices could fade lower. While the July rally brought a lot of beans to the market, that flow has stopped and prices firmed somewhat. Prices for the new crop appeared to have stopped midway on retracing the recent rally, but that point was of no consequence on Friday, since options were expiring and traders were trying to get to the $10 strike price. Exporters sold 11.9 mil. bu. of soybeans in the week ending July 16, including just 3 mil. bu. of old-crop soybeans. Marketing year sales total 1.862 bil. bu. Exporters typically sell 101% of final soybean shipments this time of year, whereas they had sold 102% by this point last year. Thus far this year sales to date total 102% of USDA’s target for the year. China has been back in the US market buying soybeans. While beans at the Dalian port are $17.67, Chinese importers bought 2.3 mil. bu. of new crop beans in the latest reporting week, but overall sales to China are still down 70% for the new crop. Late Friday China bought another 6.6 mil. bu. bu. of new crop beans. Soy meal drew attention Thursday with reports of large Argentine shipments to Europe that would preclude typical US business. Reports of lower hog and cattle feeding margins in the US and great supplies of competing protein feeds also pressured meal and soybean values.

1) Aug 15 beans closed at $10.1475, down 4.25¢ for the day, down 23.5¢ for the week.
2) Sep 15 beans closed at $10.0575, down 4.5¢ for the day, down 17.75¢ for the week.

Click to View - Wheat Prices

Click to View – Wheat Prices

Wheat prices. Winter wheat harvest is on schedule, with 75% complete, versus 74% last year. Spring wheat ratings remain above average and parallel to 2014 quality reports. The spring wheat tour by crop scouts will be held the coming week. The forecast for Midwestern wheat areas is for drier and warmer conditions, with showers and normal temperatures in the following week. Exporters sold a marketing-year high of 18.5 mil. bu. of wheat, up from 10.7 mil. the previous week and above the 5-year average for the week of 17.8 mil. bu. Marketing year wheat sales to date total 257 mil. bu., down 22% from 2014. Exporters typically sell 30% of final wheat shipments by this point, but had sold 38% this time last year. But, this year they have sold just 27%. China is a global leader in wheat production, but took a cargo of wheat from the PNW and one from the Gulf in the latest reporting week.

1) Sept 15 wheat closed at $5.54, down 8.25¢ for the day, down 22¢ for the week.
2) Dec 15 wheat closed at $5.635, down 7.5¢ for the day, down 19.5¢ for the week.

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