Crop ratings declined on Monday, helping to inspire buying on Tuesday.

https://release.nass.usda.gov/reports/prog2918.txt

Beans dropped by 2% to 69% good to excellent vs 61% last year. Still a decent rating.

Corn dropped more than expected by 3% to 72% vs 64% last year. Still a decent rating. 

The weather maps/forecasts continue to look bearish. No intense heat, in fact normal to even below normal in the main Cornbelt. That was probably the most bearish for corn yesterday but the drop in ratings matters alot today.

No widespread shut down of rains but now, we have some increasing dry pockets. In late July and August, its very difficult for rain events to be big/widespread enough to shrink most of the dry pockets.........which tend to expand, even with decent weather because evaporation exceeds precipitation this time of year with average weather. 

Corn, especially is tapping into soil moisture that was deposited earlier in the Summer/Spring, while it waits for the next round of rains.........even as soil moisture slowly gets depleted in many places. 

So.....................are the lows in?

Are the lows in?

Trading 10c off the lows right now and 68c off the late May highs.

Corn historical perspective:

Who remembers $8 corn not so long(5 years) ago   

Is the bottom in? If we have heat fill(extended heat from late July thru August), it is. If we turn cooler later this month, maybe not.

3 month below

1 year below

5 year below                                      10 year below

Are the lows in for beans?

20c off the lows and more than $2 off the late May highs.

Soybeans: Wider perspective: Currently close to 10 year lows !!!!!

Soybeans 3 months below

Soybeans 1 year chart below   

Soybeans 5 years below

Soybeans10years-Wow, look at that high from the drought of 2012...and demand, currently at 10 year lows!

mcfarm was doing back flips over this number on Monday:

                holy cow  did anybody even catch the export numbers....wow            

    https://www.marketforum.com/forum/topic/7840/       

                Started by mcfarm - July 16, 2018, 6:39 p.m.            

https://www.ams.usda.gov/mnreports/wa_gr101.txt

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                By metmike - July 16, 2018, 11:02 a.m.            

Export inspections out 1 minute ago:

https://www.ams.usda.gov/mnreports/wa_gr101.txt

Did you like the bean number mcfarm?

The June crush number was a record number again but came in around what was expected.

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                              By Richard - July 16, 2018, 9:29 p.m.            

I have never in my life traded anything you can eat and I do not understand this report. In plain English, what is going on?

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                By metmike - July 16, 2018, 10:04 p.m.            

Richard,

Glad that you asked. 

Because of the tariff war with China, soybeans are getting crushed..........not literally(which happens for them to be used-more on that below) but figuratively as in the price has dropped over $2 a bushel from a high in SX at the end of May at $1060 to the current price around $854/bushel.

A lot of this drop has been the market expectations of our exports to China going to ZERO and China has been, by a very wide margin our biggest customer. 

There are other reasons, like outstanding weather and predictions for record yields. The USDA report last Thursday was unbelievably bearish. Ending stocks for next year were projected at 200 million  bushels higher levels than they were just a month ago. 

So back to China and demand and the export inspections. Without China buying our beans, exports should be plunging but somebody sure took alot of beans.

The sales number that we get on Thursday mornings are just that...........sales. Big numbers are good(they haven't been that good recently) but sales can be cancelled. Inspections on Monday mornings report are what is going out.

The last 2 weeks, inspections were at 600,000+.  Not huge but still pretty decent and probably more than most expected.

Am not sure what the break down is regarding what countries are getting those beans but beans are the cheapest they have been in over 10 years, so alot of places are probably loading up. 

Apparently, China is going to buy all their beans from South America. SA is going to run out of beans or/and the price is going to run up from Chinese buying compared to the price in the US......................so the rest of the world knows where to go to get cheap beans...................the US.

So China can either cut back on their use of beans or pay more for them in SA. It does hurt the US a bit, especially when the market is trading a negative effect and funds sell the heck out of them but on the global market, if US beans are the cheapest(which they are by quite a bit) buyers will show up. 

http://odells.typepad.com/blog/an-explanation-of-the-soybean-crush.html