Another bearish report from the USDA has brought Dec Corn all the way back from Where it started up – back in early May! Truly incredulous! It’s like the slowest planting pace In recent memory never really happened! We know it did! And we think substantial yield drag & prevent acres will impact this crop but that it might take actual Fall Harvest to reveal this!
FACTORS IMPACTING THE MKT
1. EXPORTS – Mon Inspections were 510,000 (600-800) & Thur sales were 363,000 (100-400)
2. CROP CONDITIONS – Gd/Ex went from 57 to 56 Ill – 42 (40) Ind -32 (33) Iowa – 65 (65) Ohio – 32 (34) Silking – 99(95) Dough – 55 (76)
3. USDA AUGUST CROP REPORT – Ouch! Another bearish shocker!
Crop Prod Est – 13,901 (12,719 – 13,550)
Yield 169.5 (162.0 -167.4)
Stocks 19-20 2181 (1297 – 1900)
Global 19-20 307.7 (282.0 – 298.7)
4. US/CHINA – more tariffs announced Friday morning – rocked the mkt that was leaning higher due to disappointing yields reported by the Pro Farmer Tour & cooler weather ahead
5. PRO FARMER TOUR- has completed its annual 7-state tour and will be announcing Its final yield estimates after the close today – generally, the tour revealed inconsistent results & a widespread lack of maturity – but almost without exception – lower yields than last year & lower than the 3-year average
6. COOLER TEMPS AHEAD – is NOT what the doctor ordered – to finish this crop! What we need are “heat units”!
7. RIGHT BACK WHERE WE STARTED FROM – amazingly, Dec corn futures have completely retraced the $1.00 up move spawned by the historic planting delays
We feel “yield drag” & “prevent acres” will come home to roost but that it will take the actual combines rolling before the worse-than-expected crop is identified!
Nov beans have held up better than Dec corn & Dec wht but even they weren’t stout enough to withstand the ravages of increased tariffs – announced by China at 7am this morning! In fact, no mkt was immune to the knee-jerk downward slide precipitated by the disappointing report! The stock mkt, crude oil & all the grains plummeted on the news! Only gold & silver were upside benefactors -in a flight-to-quality, inflationary rally! However, the mkt has become numb to any news about the US/China trade war – good or bad so many feel – this negative news may result in a “bearish exhaustion of prices”!
As the perennial weak sister, Dec wht has had no positive news on its own to offset the negative news from its sister mkts – corn & beans – and have followed them on the path of least resistance – to the downside. US wht is too high on the world mkt & our exports have suffered accordingly & while the Pro Farmer Crop Tour has consistently reported smaller yields than the USDA & also smaller than last year, they weren’t dramatically less than expected – & as such, weren’t a real boon to the bull’s case! The only potential good news for the upside is unseasonably cool weather that could portend an early frost.
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