Grains all turned higher to close:
Dec Corn +1/2 cents/bu (5.49 1/4)
Nov Soybeans +1 1/2 cents/bu (13.61)
Sept Chi Wheat + 14 1/4 cents/bu (6.88 3/4)
Cdn $ +0.00390 (79.805 cents) ßPutting pressure on the basis
WTI Crude Oil +0.74/barrel (72.39)
The markets are expected to be well supported in the coming week as they move through the US Hard Red Spring Wheat Tour, a tour which is bound to confirm what USDA Crop Ratings have shown for weeks – a disaster. Scouts on Day 1 of the Wheat Quality Council’s annual spring wheat tour found an average spring wheat yield of just 29.5 bu. per acre. That’s well below 2019’s 45.6 bu. per acre and the 5-year average of 43.3 bu. per acre. This poor performance is already moving the wheat market higher as the potential supply shrinks.
The EIA Report was released this morning and it showed that commercial crude oil stocks decreased 4.1 million barrels, while ethanol stocks increased 200,000 barrels. Ethanol production was noted to decreased 14 thousand barrels per day to 1,150 thousand per day. The production of ethanol utilized an estimated 100.4 million bushels of corn in the week ending July 23, down from 101.8 million the previous week, but up from 95.6 million the previous year. Estimated marketing year to date corn use for ethanol totals 4.509 billion bushels, up 166 million or 3.8% from the previous year's pace. The total is down 31 million from the seasonal pace needed to hit USDA's target, although the deficit continues to shrink.
Grains seemed to respond ever so slightly today as ADM’s CEO noted that the world lost 15 million tonnes of crop production due to bad weather in the past 2-3 weeks. Although that is just a personal opinion, it still managed to move through the headlines and into the market.
A big headline all of this week was that China is in the market to purchase some grain, although that claim is yet to be substantiated. If it does come to fruition, this would get the bulls back pushing the market higher.
The export sales report is due out tomorrow for the week ending July 22nd. Estimates are in thousand tonnes.
Weather:
U.S.- We have one more day of heat across the Midwest, before a cooling trend takes hold going into the weekend. Those moderating temperatures will bring some chances for rain, although most precipitation is forecast to fall east and south of Iowa. Debate continues to rage as to whether the good crops in the central/eastern Corn Belt are enough to offset crop losses further west. From a weather perspective, southern Minnesota and Wisconsin saw rains yesterday, with the rest of the Midwest dry. Weekend rains will favor the southern Plains, with chances for some precipitation in Missouri and southern Iowa. 6 to 10 day weather maps are trending drier than yesterday, but temperatures will be cool. The 11 to 15 day maps do show moisture returning to the eastern Corn Belt, with above normal temperatures, but the north and northwestern Corn Belt look to remain dry.
Canada- The forecast for Western Canada is showing normal hot temperatures through the next week which will continue to put pressure on the already small wheat and canola crops.
Brazil- More frost is forecasted in one of the country’s large corn growing areas.
Funds are thought to have been all buyers today.