Provided by Bower Trading
CALL TO ACTION: Markets opened higher overnight on lower crop conditions but faded into the morning session. Significant crop issues exist this year but it appears it will take time to work its way into the market as traders wait on more data before adjusting yields. Patience will play an important role in this market.
USA: U.S. outlook look mostly unchanged. A favorable mix of weather is expected in the Midwest, Delta and southeastern states over the next ten days. Temperatures will be mostly seasonable. Rainfall will be favorably distributed, but there will be some pockets of missed rainfall. Confidence in the locations of the greatest Midwest rainfall is low after tonight. West Texas rainfall has been increased for late this weekend and early next week today and the moisture will be good for crops. Some of the advertised precipitation has been exaggerated in the model data. No change in U.S. drought status is expected over the next ten days. U.S. hard red winter wheat harvesting will advance around showers. Some summer crops in the central Plains will benefit from expected rainfall. Erratic rainfall is expected in the northern U.S. Plains. The bottom line for the U.S. includes status quo conditions for much of the Midwest, Delta and southeastern states in which a few pockets of dryness will prevail and a few areas of excessive moisture will continue. The drier biased areas in Iowa will be partially eased by rain tonight and Thursday and the same may be true in parts of Nebraska, Illinois and Missouri, but other areas will not get enough rain to seriously change soil conditions. Net drying is expected to evolve late this week through at least mid-week next week across the Midwest making the need for timely rain later next week and beyond rise once again. However, conditions over this next two weeks will be largely favorable from a corn, soybean, sorghum, cotton, rice and groundnut perspective. Not all areas will be in good condition and some stresses will remain, but in general the condition of most crops is expected to be favorable with no extremes in temperature likely. Wheat harvest conditions in the central Plains will stay mostly good with progress occurring around scattered showers. Drought will prevail in the northwestern Plains and southwestern Canada’s Prairies while West Texas cotton, peanut, corn and sorghum areas have opportunity for improved rainfall over the weekend and early next week.
CANADA: Net drying occurred in the drought-stricken areas of Canada’s Prairies and that is not likely to change for a while. No change in southwestern Canada Prairies drought status is expected over the next ten days. Southeastern Ontario and Quebec weather will be quite favorable over the next week to ten days. Temperatures will be seasonable and rainfall restricted. Subsoil moisture will carry on normal crop development.
PROVIDED BY CWG
US corn crop conditions 62% good/excellent vs. 63% expected (62-65% range of ideas), 64% last week, 76% last year – conditions decline 2% good/excellent vs. expected 1% decline.
PROVIDED BY RJ O’BRIEN
Even with some of the rains that moved through the western Corn Belt, many areas remain in dire need of a general soaking to alleviate concerns. A few tenths may buy the crop a few more days but that’s it. Subsoil moisture levels are low making the month of August more important for corn.
A rain event is in the forecast for Iowa on Wednesday which will need to put down an inch+ to really save the crop. No other rain events forecast for the rest of the week.
US soybean crop conditions 57% good/excellent vs. 60% expected (59-63% range of ideas), 61% last week, 71% last year – conditions decline 4% good/excellent vs. expected 1% decline.
PROVIDED BY RJ O’BRIEN
US spring wheat crop conditions 33% good/excellent vs. 33% expected (31-34% range of ideas), 34% last week, 68% last year. Conditions were unchanged in the Dakota’s, but the Pacific Northwest saw reductions.
Wheat Quality Council Spring Wheat tour starts their routes today through Thursday. The tour should provide some more insight into potential yields and acreage abandonment.
US winter wheat harvest 84% complete vs. 84% expected (82-88% range of ideas), 75% last week, 82% last year, 80% average.
Rice has traded back to the upper end of its range and remains in an uptrend.
Conditions have improved for much of the U.S. rice crop in the last month as growing conditions have been favorable, but the early May flooding and lower acreage will still keep the total crop far below last year.
The U.S. and China reached a phytosanitary agreement which will open up the Chinese rice market to the U.S.
Producers and exporters hope higher quality rice and higher food safety standards will lure China into buying. As we have stated many times before, China’s expanding middle-class has grown more interested in quality products and could prove to be a large demand base for a relatively small market.
Exporters believe the U.S. could begin shipping rice to China as soon as late this year or early next year.
INFORMATION PURPOSES ONLY
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS