Corn condition declines, soybeans unchanged. Corn condition G/EX -2% vs. last week to 61%, soybeans unchanged at 63%, both below forecasts. Corn is holding near $4.50/bu though Soybeans have pulled back to $11.70/bu after breaching $12/bu in mid-July. Prices remain below breakeven levels (>$5 Corn, $13 Soybeans) needed for incremental equipment investment, though today’s report should prove a positive datapoint for near-term price action. We are closely watching condition reports through August as corn G/EX ending in the low-60s could provide a clearer supply catalyst for prices to move higher.
- Crop conditions G/EX -2% for corn, unchanged for soybeans, below expert forecasts; crop condition for both now in the Low-60s indicating a slightly below average crop. 61% of corn rated G/E (-2% week/week, -12% year/year) vs. consensus 63%, soybeans 63% G/E (unchanged week/week, -6% year/year) vs. consensus 64%.
- Corn silking, soybean pods setting ahead of last year, five-year average. Corn is silking 3% ahead of the five-year average (90% vs. 87%) and 4% ahead of last year while soybean pod setting came in at 62%, 7% ahead the five-year average and 6% ahead of last year, entering the critical August window.
- Precipitation expected over the next week in key growing states though hot weather to persist in the Plains. The majority of top-producing states are expected to see modest levels of rain over the next week; Plains states are particularly important at this point given dryer conditions to date (NE corn was down 6% and KS was down 8% G/EX this week) though heavier rains appear expected in IA, IL, MN, IN, and MO.
- Corn and soy prices have improved over the course of the summer on a stronger biofuel outlook (Iran), persistently hot/dry weather in the Midwest, and concerns over deteriorating crop conditions in Europe (France especially). Today’s report showing crop condition decline for both corn and steady soy both now in the low-60s G/EX is an incremental positive for prices (potentially indicative of lower yields) though other datapoints from today’s report (corn silking, soybean pods setting) remained solid. Healthy rain is in the forecast this week across key corn/soy states. Weather is now a critical swing factor - the US crop is feeling some stress, next three weeks will be telling.
Source : Farm Equipment