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Published July 28, 2014, 10:19 AM

Weather pressures

Wheat traded with losses for three out of four sessions last week. For the week ending July 24, September Minneapolis dropped 10.5 cents, September Chicago was off 3.5 cents and September Kansas City slipped 13.25 cents.

By: Ray Grabanski, Agweek

Wheat

Wheat traded with losses for three out of four sessions last week. For the week ending July 24, September Minneapolis dropped 10.5 cents, September Chicago was off 3.5 cents and September Kansas City slipped 13.25 cents.

Wheat traded with losses to start the week. Both July 21 and 22 sessions traded with losses. Selling was tied to improving weather forecasts, as warm, dry conditions prevailed in the Plains over the weekend, and the extended forecast is calling for more of the same. Additional selling was tied to spillover selling from the corn market, as wheat is still somewhat tied to the direction of corn. The July 22 session had Chicago wheat hitting another new low and that triggered sell stops, which only accelerated session losses. The Spring Wheat Quality Tour started on July 22 and early reports from the tour are showing good-looking wheat with high yield potential.

The July 23 session had wheat bouncing slightly with support coming from technical buying. Additional support came from weather forecasts calling for rain in parts of the southern Plains and Delta, which would result in a slowdown in harvest.

Selling returned to the market July 24. There is little bullish news for wheat presently with favorable weather for winter wheat harvest in the eastern Midwest. Political concerns in the Black Sea region have moved to the background, and there are no other problems to hinder wheat production worldwide at the moment. July 24 export sales were good, coming in above the amount needed to keep pace with the U.S. Department of Agriculture’s projection.

As of July 20, 84 percent of the nation’s spring wheat crop was headed, compared with 69 percent the previous week and 85 percent for the five-year average. Spring wheat conditions were estimated at 70 percent good to excellent, 25 percent fair and 5 percent poor or very poor, unchanged from the previous week. Winter wheat harvest was estimated at 75 percent complete, compared with 69 percent the previous week and 75 percent for the five-year average.

Corn

The corn futures traded to new contract lows last week, with ideal weather and talk of record yield potential. The crop condition ratings are near the highest in history and private tours state the stand counts are very good. Most traders also think the corn crop is made with the nonthreatening weather forecast into August and the end of pollination. As of the July 24 close, the September contract was down 9.75 cents for the week, while the December contract lost 9 cents and posted a new contract low at $3.6425.

The corn market traded under pressure on July 21 and 22, with near-ideal weather over the weekend and a good forecast. Temperatures were warm to start the week, but the weather cooled down into the weekend with scattered rain throughout the Midwest. Traders were also focused on the crop conditions report and USDA left the conditions unchanged from the previous week, with 76 percent of the crop in the good to excellent category and silking slightly ahead of the five-year average. Conditions usually start to deteriorate this time of year.

A short covering bounce helped corn close slightly higher for the only day of the week on July 23. The futures also found support from the weekly ethanol report that showed corn use up and a slight drop in stocks. The strength in the soybeans also spilled over. Pressure came back into the trade on July 24, with a forecast that calls for scattered rain and below-normal temperatures for the Corn Belt this week, which is ideal to finish up pollination. The strong crop ratings also limit buying interest, along with record yield potential being talked about for Illinois and Iowa. Estimates continue to surface with yield expectations exceeding 170 bushels per acre and production above 14 billion bushels. China also said it will not import dried distillers grains without a certification that they do not contain nonapproved genetically modified varieties.

Ethanol production for the week ending July 18 averaged 959,000 barrels per day, up 1.7 percent from the previous week. Total ethanol production for the week was 6.713 million barrels. Corn used in production the week ending July 18 is estimated at 100.7 million bushels and needs to average 111.745 million bushels per week to meet this crop year’s USDA estimate of 5.075 billion bushels. Stocks were 17.94 million barrels, down 0.03 percent from the previous week.

The crop progress report has the corn rated at 76 percent good to excellent, 19 percent fair and 5 percent poor or very poor. Ratings were 63 percent, 23 percent and 11 percent, respectively one year ago. Corn that is silking is at 56 percent, compared with 39 percent one year ago and a five-year average of 55 percent.

Soybeans

As of the July 24 close, August soybeans were 30.75 cents higher for the week, while the November contract lost 0.5 cents. At 10 a.m. July 25, August soybeans were trading 0.25 cents higher, while November was down 7.25 cents.

Early July 21 old-crop soybeans were trading slightly higher with support from an export sale announcement of 120,000 metric tons to China for 2013 and 2014 delivery. The new crop November was lower, and eventually pulled the old crop along with it, as soybeans closed lower across the board. Favorable weather in the forecast continues to weigh on soybeans, as traders continue to expect a record harvest following USDA’s record acreage estimate. July 21 export inspections were bearish, coming in below the amount needed to keep pace with USDA’s projection.

August soybeans traded higher July 22, with support from recent Chinese purchases and still-tight supplies. Meanwhile, the November contract set a new low as nonthreatening forecasts pressured the market. Additional pressure came from the July 21 crop progress report. Progress was shown to be ahead of the five-year average in both blooming and setting pods. Conditions were improved from the previous week, as well, with good to excellent increasing from 72 percent to 73 percent. On July 22, USDA announced sales of soybean cake and meal, 180,000 metric tons to Vietnam and 225,000 metric tons to unknown destinations, both for 2014 and 2015 delivery. A sale of 20,000 metric tons of soybean oil to unknown destinations for 2014 and 2015 delivery was announced, as well.

Soybeans closed with gains July 23 and 24, as renewed export demand provided support. China’s interest in old- crop soybeans has been renewed with cash prices in Brazil higher than those out of the U.S. Gulf. But the trend remains to the downside with a large crop expected and weather remaining mostly nonthreatening. There are some minor weather concerns growing with drier conditions in the western Midwest. July 24 export sales were 98.4 million bushels, with the majority being new crop. Old-crop sales and shipments remain well ahead of USDA’s estimate, currently 64 million bushels above it.

Soybeans blooming were at 60 percent, compared with 41 percent the previous week and the five-year average of 56 percent. Soybeans setting pods were at 19 percent, compared with the five-year average of 17 percent. Conditions for soybeans were rated 73 percent good to excellent, 22 percent fair and 5 percent poor or very poor.

Barley

As of July 20, 92 percent of the nation’s barley was headed, compared with 83 percent the previous week and 86 percent for the five-year average. Barley crop conditions improved 2 percent to 66 percent good to excellent, 29 percent fair and 5 percent poor or very poor.

July 24 cash feed barley bids in Minneapolis were at $2.90 per bushel, while malting bids were $5.60.

Durum

As of July 20, 35 percent of North Dakota’s durum crop was headed, compared with 24 percent the previous week and 68 percent for the five-year average. North Dakota’s durum crop condition rating remained unchanged at 82 percent good to excellent, 17 percent fair and 1 percent poor.

July 24 cash bids for milling quality durum were at $9 per bushel in Berthold, N.D., while the Dickinson, N.D., bid was at $8.70.

Canola

Canola futures on the Winnipeg, Manitboa, exchange closed the week ending July 24 $2.60 (Canadian) lower. Canola started the week off with losses. The first two sessions saw selling tied to spillover pressure from a lower U.S. soybean complex. Selling was also tied to improving weather conditions. The July 22 session had canola trading at new contract lows. The second half of the week had canola trading higher because of gains in U.S. soybean futures and solid end-user demand provided support to canola futures. Technical buying was also evident, as traders attempt to bottom pick.

As of July 20, North Dakota canola was 96 percent in bloom, compared with 86 percent the previous week and 90 percent for the five-year average. Canola’s crop condition rating declined 1 percent to 84 percent good to excellent, 15 percent fair and 1 percent poor.

July 24 old-crop cash canola bids in Velva, N.D., were at $17.29 per hundredweight, while new-crop bids were $17.67.

Dry edible beans

As of July 20, North Dakota’s dry bean crop (40 percent of the nation’s crop) was 48 percent in bloom, compared with 23 percent the previous week and 52 percent for the five-year average. North Dakota’s crop was rated 71 percent good to excellent, 23 percent fair and 6 percent poor or very poor, 1 percent better than the previous week. Minnesota’s crop (7 percent of nation’s crop) was 43 percent in bloom, compared with 15 percent the previous week. Minnesota’s crop was rated 50 percent good to excellent, 36 percent fair and 14 percent poor or very poor, unchanged from the previous week. Nebraska’s crop (10 percent of nation’s crop) was 22 percent in bloom, compared with 6 percent the previous week and 25 percent for the five-year average. Nebraska’s crop was rated 80 percent good to excellent, 16 percent fair and 4 percent poor or very poor, unchanged from the previous week. Michigan’s crop (12 percent of the nation’s crop) was 29 percent in bloom, compared with 17 percent the previous week and 30 percent for the five-year average. Michigan’s crop was rated 77 percent good to excellent, 18 percent fair and 5 poor or very poor, unchanged from the previous week.

Sunflowers

As of July 20, North Dakota’s sunflower crop was 1 percent in bloom, compared with zero the previous week and 5 percent for the five-year average. North Dakota’s sunflower crop was rated 80 percent good to excellent, 19 percent fair and 1 percent poor, a decline of 1 percent from the previous week.

July 24 old-crop cash sunflower bids in Fargo, N.D., were at $18.95 per hundredweight, while new-crop sunflower bids were $19.05.

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