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Weekly Market Review

By Staff | Aug 19, 2020

Crop ratings for the week ending July 12th did not show much decline with all the hot weather the past two weeks. Corn condition ratings fell 2% for the week to 69% good/excellent. Corn pollinating is up 19% for the week to 29%, just 3% shy of the 5-year average. Soybean condition ratings dropped 3% for the week to 68% good/excellent. Soybeans blooming are up 17% for the week at 48%, which is 8% ahead of the 5-year average.

Without a significant continued decline in ratings, traders will be reluctant to think that the heat has done much yield damage over the past 10 days. The old adage that crop ratings are not highly correlated to final yield comes back to mind. Looking at corn ratings at this point in the growing season near 70% good/excellent would tend to indicate thoughts of trend line yields are still possible. Overall weather is less threating; rain has fallen in many dry areas in recent days, reducing production concerns.

Forecasts have moderated, as excessive heat has been limited in the near-term. Extended forecasts show warmer temperatures, but not excessive warming, and forecasts also show the warming with some precipitation. Forecasters have noted the unpredictable summer weather models, but chances of a hot and dry end to summer is slightly below 50 percent. June was one of the hottest months in the Corn Belt over the past 40 years with 1988 and 2012 the exceptions. However, soil moistures were much more adequate than 2012. So far July has seen adequate rains but distribution has been an issue. Nearly one fourth of the belt has seen less than 50% of their normal rainfall this month. However, 20% of the belt saw more than 125% of normal rainfall.

News of Chinese export sales continue to provide support to the market with both old crop and new crop soybean sales being announced this week. China has stated that despite the current tension between the U.S. and China, they are hopeful that the phase 1 trade deal will stay intact, and that trade commitments will be met. Weekly export sales report released this week showed old crop corn sales at 38.6 million bushels. New crop corn sales were lower than expected coming in at 25.8 million bushels on the week. Old crop soybean sales were at the lower end of market expectations with 11.5 million bushels being reported. New crop soybean sales were strong at 28.2 million bushels.

The USDA announced that China purchased 66 million bushels of U.S. corn this week for 20/21, the third largest ever corn export sale followed by another purchase of 5.2 million bushels of U.S. corn later in the week. This has many analysts questioning what China’s actual import quota will be, since it seems they’ve surpassed the original 282 million bushel quota set earlier by buying a good chunk of their purchases from the Ukraine. China’s monthly soybean imports also hit an 11-month high in June at 410 million bushels, 71% higher than last year. While soybean imports are significantly higher, this comes on the heels of a huge decrease in demand from China from African Swine Fever drastically reducing feed demand.

For more information, you may contact Adam Suntken at (712)-454-1061, or e-mail at asuntken@maxyieldcooperative.com. The opinions and views expressed in this commentary are solely those of Adam Suntken. Data used in writing this commentary obtained from various sources believed to be accurate. This commentary is intended for informational purposes only and is not intended for developing specific commodity trading strategies. Any and all risk involved with commodity trading should be determined before establishing a futures position. Please visit our Risk Disclosure Page for more information on commodity trading.

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