For the latest weather effecting Grains, go here:
Export sales:
Crop ratings declined on Monday, helping to inspire buying.
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 show a growing dry pocket in the southwest belt.
No intense heat, in fact normal to even below normal in the main Cornbelt.
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.
Are the lows in?
Corn Trading 14c off the lows right now and 64c off the late May highs.
Corn historical perspective:
Who remembers $8 corn not so long(5 years) ago
Is the bottom in? If the heat returns in August and causes heat fill it is.
3 month below
1 year below
5 year below
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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
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Soybeans 1 year chart below
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Soybeans 5 years below
Soybeans10years-Wow, look at that high from the drought of 2012...and demand, currently at 10 year lows!
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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
With the difference in price between US beans and SA beans, if I'm SA, I'm buying US beans and selling them to China! Why would they not? Easy money.
Yes Jim, this makes sense. It's a global market. Everybody can buy and sell from everybody else.
If the prices in one place(SA) are higher than the other place, buyers will go to the other place.
There are many, many countries in the marketplace. Even if China is the biggest buyer by far, world supplies and demand are world supplies and demand...........which to a big extent determines prices.
If China buys everything in SA, world supplies or demand don't change much. It shifts the dynamics and prices so that SA prices WILL be higher than the US but world supplies and demand and global trading will keep things in balance and from getting out of control.............prices in SA won't stay $2/bushel higher than in the US for very long for instance because all the demand will shift to the US, including, SA being able to buy US beans at rock bottom prices.
By bcb - July 19, 2018, 11:13 a.m.
We're very dry in N. IL. Bring on the rain.
Corn by the numbers. Front month corn unchanged for the yr.350.75 The High for the month of july/contact was 352.25. The battle begins