Tag Archives: corn

Summary

Market Recap 7-14

Equities were able to overcome their concerns from California’s move to put Covid-19 restrictions back in place and moved higher on Tuesday. Earnings week kicked off fairly strong for companies on Wall Street. PepsiCo was a prime example of positive 2nd quarter financials. Snack revenue was able to pick up the slack caused by slumping soda sales. Big banks are also reporting strong 2nd quarter earnings, but they also show that they are keeping billions in reserve for possible loan defaults later on in 2020.

Economic data out on Tuesday showed that the US saw slight inflation in June with the Consumer Price Index coming in at +0.6%. That was just above analyst estimates and well above May’s -0.1%. Inflation is still a long ways from the FED’s target of 2%. Traders prime concern is still how much economic damage will be done if states start to follow California and start to lock down the economy. If other states start to follow California this could quickly swing the markets lower.

The US dollar and precious metals shed some long positions on Tuesday with some of the money flow headed back to the Euro.

Energies were able to take slight advantage of a lower dollar, but are still range bound at $39-$40/barrel on WTI crude. Traders will continue closely watching energy stocks and consumption to see how the rising covid-19 cases are impacting energy demand. OPEC is also warning they will ease production restrictions and increase output by nearly 2 million barrels per day. Helping the energy sector is the US Dollar which is down about 0.25% at the time of this writing.

US China tensions are heating up on Monday. China lashed back at the US with sanctions against several GOP lawmakers who are hawkish on China. This was in response to the US placing sanctions against several key Chinese government officials for human rights violations. Overnight China also retailiated and placed sanctions on Lockheed Martin. Tensions didn’t bother Chinese importers Tuesday mornign. USDA announced the 4th largest flash sale of corn, 1,762,000 MT, to China. This was the largest purchase of corn in a single day since the 1990s according to USDA. The record is still held by the USSR at 3.72 MMT January 9, 1991.  China also purchased 129,000 MT of soybeans. All for delivery in the 2020/2021 marketing year. This has some analysts concerned how China will leverage the large stockpile of grain it has committed to buy from the US for the 20/21 marketing year. Mike Zuzolo, Global Commodity Analytics addressed this in his midday commentary.

Grains closed  mixed on Tuesday. Corn and KC wheat were lower. Soybeans and Chicago Wheat were higher.  Looking at seasonal patterns corn and soybeans tend to bottom in July. Wheat is typically a month ahead of that, but for 2020 it looks like the harvest low may have came in early July. The big thing to keep in mind even if things do stabilize the market is likely to trade sideways with limited upside potential. Rain continues to be widespread across the Midwest. Part of the precipitation is coming with a high price of destructive wind and hail. It likely isn’t affecting a big enough area though to make a big impact on the overall crop. The latest crop progress report shows a slight decrease in corn and soybean ratings week to week, but they are still well ahead of year ago condition levels. That will continue to keep those strong trend line yields in place and likely make for a large US fall crop.

For a little good news StoneX Chief Economist Arlan Suderman reports that US export shipments of corn are now running 6 million bushels ahead of pace to hit USDA’s goal. That is up from 3 million bushels last week. The US Dollar will now have to cooperate to keep that pace though as South American corn is starting to hit the market.

Livestock closed mostly lower on Tuesday. With states like California rolling back their reopening plans and closing dining rooms how much food service demand will again be lost. So far carcass cutouts have yet to fall hard and load count is still very active. This could change quickly though, especially if more states start to follow suit. Cash and a strong close in the equities on Tuesday could give cattle a boost on Wednesday.

There was a light trade develop in Kansas and Texas on Tuesday at $95-$96.50. Most of that trade was $95. That is fully steady with last week’s weighted average in the South. There was no trade reported in the North. Asking prices are still around $100 plus in the South, and $162 plus in the North.

 

Expected Slaughter numbers Tuesday

Cattle

120,000 hd today 121,000 hd wk ago 121,588 hd yr ago

Hogs

466,000 hd today 462,000  hd wk ago 473,311 hd yr ago

 

Midday Carcass Value Tuesday

Beef

Choice dn 2.47 200.79

Select  dn 0.10 191.78

C/S Spread 9.01

Loads 91

Pork

Carcass up 0.58 68.10

Bellies up 2.23 101.80

Loads 227

 

Grains Settlements

  • Corn dn 2-3
  • Soybeans up 1 1/4 – 4
  • Chicago Wht up 1 – 2
  • Kansas City Wht dn 6 – 6 3/4

Livestock Settlements

  • Live Cattle dn 0.32 – 1.22
  • Feeder Cattle dn 0.30 – 1.20
  • Lean Hogs dn 1.35 up 0.55
  • Class III Milk dn 0.61 up 0.01

Pre-Opening Market Broker Commentary

Mark Gold, Top Third Ag Marketing, discusses overnight grains and what the trade may see today. China made a large purchase of corn and soybeans.


Jerry Stowell, Country Futures,  looks at what may impact the livestock futures today. Cattle are not offering a lot of direction ahead of the open.


Mike Zuzolo, Global Commodity Analytics, takes a look at the midday trade. Corn calendar spreads may give an idea of what the cash market is thinking. China is needing corn.


John Payne, Daniels Ag Marketing, looks at the grain settlements. Corn saw a large sale before the open, but large stockpiles kept corn from moving higher.


Jack Fenske, York Commodities, looks at the closing market numbers.

The latest crop progress report shows the toll the hot, dog days of summer are bringing for crops, pastures and moisture conditions. Corn and soybean conditions continue to deteriorate for most states, but a select few were able to see weekly condition increases. Winter wheat harvest continues to move closer to the finish line as far Northern states starts the very first days of their winter wheat harvest.

Corn silking is the first segment of the latest crop progress report. Corn silking is also one of the first development stages to fall behind the 5 year average pace. Nationwide 29% of the corn crop has reached silking. That is 3% behind the 5 year average of 32%. Kansas is 1% ahead of the 5 year average at 47%. Nebraska is 10% behind the five year average at 19%. For the big I states Illinois is the farthest behind in corn silking at 36%. That is 16% behind the 5 year average.

July 13 is the first week to report corn entering the dough stage. Nationwide the corn crop is on pace with the 5 year average 3%. Nebraska is ahead on the dough stage at 1%. Kansas has outpaced the 5 year average at 9%. Texas has the most corn in the dough stage at 60%.

Corn condition dropped for most states, but Kansas improved 1% to 53% good to excellent. Nationwide the corn crop is rated 69% good to excellent. Down 2% from a week ago. Iowa’s corn crop is rated one of the best in the nation at 83% good to excellent, down 2% from last week. Nebraska corn dropped 4% week to week at 70% good to excellent.

Across the country 11% of the soybean crop has set pods. That is up 9% from a week ago. Nebraska soybeans have set pods on 13% of the crop. That is 9% ahead of the 5 year average. Kansas soybeans have set pods on 6% of the crop. Doubling the Kansas 5 year average for soybeans setting pods at 3%. Arkansas has the most pods set on their soybean crop according to NASS at 30%. That is actually down 14% from the five year average.

Soybean condition in the US according to NASS is 68% good to excellent, down 3% from a week ago. The national rating is still 14% ahead of a year ago. Nebraska soybeans dropped 3% to 73% good to excellent. Iowa soybeans dropped 1% to 83% good to excellent. Kansas was one of the few states to actually see an improvement week to week in their soybean condition to 59% good to excellent, that is up 2%.

Sorghum is starting to color up across the country and saw a signifcant drop in Nebraska condition rating. Nebraska sorghum was rated 53% good to excellent, down 15% from the previous week. Nationally sorghum is rated at 46% good to excellent, down 2% from last week and 28% lower than a year ago.

Winter wheat harvest is chugging steadily for the finish line at 68% complete nationally. Compared to a year ago that is 14% ahead and 2% ahead of the 5 year average. Nebraska is just at the half way mark, up 10% from a year ago. Meanwhile Kansas is just 5% away from join Oklahoma and Texas at 100% complete. Northern states like Idaho and Washington are just getting started with wheat harvest at 2% each.

Oat harvest is looking to be fast and furious in 2020. The first oat harvest report from NASS shows nationwide 12% of the oat crop is in the bin.  Nebraska is 30% complete, up 6% from the 5 year average. Texas has the most oats harvested at 95% complete.

Pasture and range condition continues to deteriorate across much of the country. Kansas again one of the few states to improve week to week at 41% good to excellent. That is up 1% from last week. Nebraska pasture saw a dramatic drop of 15% from lat week to just 48% good to excellent. Colorado pasture and range has more in the very poor to poor rating at 44% than it does in the good to excellent range at 23%.

Finally soil moisture was able to recharge just a little last week with the wide spread rains. Nebraska topsoil moisture gained 3% to 53% adequate to surplus. Kansas topsoil moisture also gained 3% to 55% adequate to surplus. California is giving New Mexico a run for it’s money for the driest top soil at 40% short to very short. New Mexico is still the driest top soil though at 44% short to very short.

Finally subsoil moisture follows a similar pattern. Kansas subsoil improved 1% to 55% adequate to surplus. Nebraska subsoil deteriorated 1% to 60% adequate to surplus. Wyoming is starting to see a drastic shift in subsoil moisture this week to 71% short to very short.

You can see the full crop progress report here:

https://downloads.usda.library.cornell.edu/usda-esmis/files/8336h188j/w6634r16g/cz30qf661/prog2920.pdf

Clay Patton has a full recap of the report here:

Western corn rootworm beetles began emerging in southeast and south central Nebraska at the end of June. Beetles typically emerge somewhat later in northeastern and western Nebraska.

Beetles emerging before silk emergence may feed on corn leaves. They feed by scraping the surface tissue, leaving a white parchment-like appearance. Once silks emerge, they become the favored food. The earliest silking fields in an area often are most heavily damaged because beetles will move to them in search of green silks.

There are no thresholds for silk-clipping damage based on beetle numbers because damage levels are not correlated well with beetle densities. Usually an average of 5-10 beetles per ear is required to seriously affect pollination. Severe silk feeding (silks clipped to less than ½ inch from the ear) at 25%-50% pollen shed may indicate a need to apply insecticide. Silk feeding after pollination is complete does not affect yield potential.

See the 2020 Guide for Weed, Disease, and Insect Management in Nebraska (EC 130) for insecticides labeled for adult rootworm control.

Japanese beetles also prefer to feed on corn silks. See the article Japanese Beetles Emerging; Scout Corn and Soybean Fields for Japanese beetle thresholds for silk feeding damage.

  • What is the current driving force in the markets?
  • What role are the funds currently playing in the corn and soybean markets?
  • How does a weather market normally progress?
  • What are you expecting for changes in the WASDE report for corn?
  • Are you expecting much for changes the WASDE report for soybeans?

 

  • Weather is the primary factor and a bigger factor then reports on Friday
  • Some much-needed rain will hit fields…then watch out here comes the heat
  • June first to present the U.S. corn belt there were two years that were hotter ’88 & 2012.
  • Ethanol production continues to increase
  • Money and coronavirus…deaths per week are at a low
  • How will COVID continue to effect meat demand

For the first full week of July corn and soybean ratings started to drop slightly across the nation.Corn silking is the first crop condition area we see that is actually behind the five year average. Winter wheat harvest is rolling along ahead of schedule in most states.  Top soil and subsoil moisture continue to be dry and dropping across the country.

NASS estimated that 71% of the corn crop was in good-to-excellent condition as of Sunday, July 5, down 2 percentage points from 73% the previous week but still well above 57% at the same time a year ago.

For corn Iowa and Minnesota set at the top of the pile with 85% good-to-excellent condition ratings. Pennsylvania stays a close second at 82% and Nebraska it towards the top at 74% good to excellent.  On the opposite end of the scale Michigan and Colorado have the highest percentage of corn rated very poor to poor, at 14% and 16%, respectively.

Up to this point in the growing year much of the crop progress has been well ahead of the five year average. Corn silking however continues to to run behind the five year average. NASS estimated that 10% of corn was silking, 6 percentage points behind the five-year average of 16%.

Soybean development, on the other hand, was near to slightly ahead of normal last week. Soybeans blooming was estimated at 31%, 7 percentage points ahead of the five-year average of 24%, while soybeans setting pods was estimated at 2%, near the five-year average of 4%.

Looking at the state by state break down Iowa is now 37% in bloom, Minnesota 43% and Nebraska 41%. All these ratings are well ahead of their respective 5 year average.

The national soybean condition rating came in the same as the corn crop: 71% good to excellent nationwide. That was unchanged from the previous week and still well ahead of 53% at the same time last year. Iowa was 84% good to excellent, along with Minnesota 83% , Wisconsin 79% and Nebraska 76% .

Meanwhile, winter wheat harvest moved ahead 15 percentage points last week to reach 56% complete as of Sunday, 1 percentage point ahead of the five-year average of 55%.

Harvest in Kansas in 80% complete, Illinois is 81% and Missouri is at 84% finished,. Nebraska winter wheat is 16% harvested, and South Dakota has not started yet.

Winter wheat condition — for the portion of the crop still in fields — was rated 51% good to excellent, down 1 percentage point from 52% from the previous week. Sixty-one percent of North Dakota’s winter wheat crop was rated good-to-excellent.

View the full report here: https://downloads.usda.library.cornell.edu/usda-esmis/files/8336h188j/c247fd92b/1g05g1123/prog2820.pdf

Clay Patton breaks down the full report here: