Not much excitement with the July 10 report

By Doug Tenney, Leist Mercantile

Don’t put away the sunscreen protection just yet. Another heat wave with 90 degree temperatures returns the middle of next week across Ohio.

The huge U.S. 2020 acres decline for corn with the June 30 report paints a much different picture compared to last month. Last month USDA had new corn ending stocks at 3.323 billion bushels. Some had expected that number would eventually reach 4 billion bushels. Corn ending stocks for 2020-21 were expected to be cut with the 5 million acres decline from June 30.

Bigger changes for corn had been expected with this report. However, few changes were expected for soybeans and wheat. With the flare-up of the Coronavirus the past two weeks, U.S. export totals for corn, soybeans, and wheat were expected to be reduced. Demand for grains continues to be anemic. However, yesterday’s weekly U.S. grain sales report were surprisingly better than expected.

Shortly after the USDA report was released, corn was down 5 cents, soybeans down 3 cents, and wheat up 5 cents. Moments before the noon report, corn was down 4 cents, soybeans down 1 cent, with wheat up 4 cents.

Weather will be continue to be a significant factor for the next two weeks. Current weather forecasts provide tremendous uncertainty as the two weather models are vastly different. The American model details normal rains for the Midwest. Conversely, the European model calls for hot and dry conditions. Today should end the 12-day streak of 90 degrees or more for Ohio.

Old corn exports were 1.775 billion bushels, unchanged. Corn for ethanol was 4.850 billion bushels, down 50 million bushels. Old crop soybean exports were 1.650 billion bushels, also unchanged. Soybean crush was up 15 million bushels.

Old crop ending stocks were expected to increase for both corn and soybeans. Corn ending stocks were 2.248 billion bushels, last month was 2.103 billion bushels. Soybean ending stocks were 620 million bushels, last month was 585 million bushels.

New crop corn ending stocks were 2.648 billion bushels, last month was 3.323 billion bushels. Soybean new crop ending stocks were 425 million bushels, last month was 395 million bushels. Wheat new crop ending stocks were 942 million bushels, last month was 925 million bushels.

Trader estimates had old corn ending stocks at 2.277 billion bushels with old soybean ending stocks at 584 million bushels. Looking at trader estimates for new crop, corn was 2.683 billion bushels, soybeans 416 million bushels, and wheat 948 million bushels.

Ohio’s producers will be anxiously anticipating rains this afternoon. Mid-morning hourly weather forecasts had rain probability at 40% to 90% in much of Ohio this afternoon. Parts of northwestern Ohio were getting rains this morning. At 7 p.m. this evening we will know if the rains really materialized.

In China the Yangtze River Basin has received as much as 30 inches (not a misprint) of rain since Sunday. The high corn and soybean production region for China is north of this flooding. However, it could be affecting rice production. This weather event is mentioned as it is receiving very, very little press so far so week.

Some are suggesting the early July rally to date is not a seasonal July rally. Corn and soybean crop ratings after the July 4th holiday are among the highest in years.

Barring any major surprises with today’s report, the market will be back to trading weather less than 10 minutes after the report release.

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