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Published August 25, 2014, 09:54 AM

Favorable weather pressures

Wheat traded back and forth last week. In the end, wheat ended mixed with hard wheat (Kansas City and Minneapolis) ending with strength, while the soft wheat (Chicago) slipped. For the week ending Aug. 21, September Minneapolis gained 3.75 cents, September Chicago dropped 5 cents and September Kansas City gained 2.25 cents.

By: Ray Grabanski, Agweek

Wheat

Wheat traded back and forth last week. In the end, wheat ended mixed with hard wheat (Kansas City and Minneapolis) ending with strength, while the soft wheat (Chicago) slipped. For the week ending Aug. 21, September Minneapolis gained 3.75 cents, September Chicago dropped 5 cents and September Kansas City gained 2.25 cents.

Wheat struggled during the Aug. 18 and 20 sessions. The Aug. 18 session brought in the first session of losses in three days. Spring wheat harvest is starting to get underway, and that weighed in on the markets, as well as expectations that have the potential spring wheat yield at a record. News that Russia and Ukraine are in talks added to the pressure. Late week selling pressure came from spillover selling from a lower corn and soybean market as the Corn Belt crop tour is finding strong potential yields. A stronger U.S. dollar added to the selling pressure, as the higher U.S. dollar limits wheat export demand.

The Aug. 19 and 21 sessions had all three of the wheat exchanges trading with gains. Commercial buyers responded to cheap prices after seeing wheat trade to new lows the week before. Additional buying support came from adverse weather conditions, as well as from a friendly Statistics Canada report. On the weather front, rain continues to hamper harvest progress in Europe and is now affecting wheat harvest in the Northern Plains. This past week’s rains have halted spring wheat harvest and are also hurting the quality of the crop (reports have test weights dropping and scab showing up).

Wheat was also supported by Statistics Canada report. The report was friendly for wheat, with numbers coming in lower than traders had expected. Statistics Canada estimated Canada’s all wheat production at 1 billion bushels, compared with 1.38 billion last year.

As of Aug. 17, 17 percent of the nation’s spring wheat crop was harvested, compared with 6 percent the previous week and 33 percent for the five-year average. Spring wheat conditions were estimated at 68 percent good to excellent, 26 percent fair and 6 percent poor or very poor, a decrease of 2 percent from the previous week.

Corn

The corn market struggled last week because of large yield estimates from the Pro Farmer Tour and good weather. The tour yield numbers were all well above the three-year average and above USDA’s August estimate. There was also widespread rain that fell early in the week, with more forecast in the next week and warm temperatures through the weekend. As of the Aug. 21 close, September was down 3.5 cents, while December lost 8 cents.

Corn was firm overnight Aug. 17, finding support from the previous week’s upside reversal and a move above the 20-day moving average for the first time since early May. But the early gains could not hold. Forecasts for an active precipitation pattern for the next week caused most of the pressure. The Pro Farmer Tour also kicked off on Aug. 18 and the early reports are good. The market closed with small gains on Aug. 19, despite all signs continuing to point toward a record harvest this fall.

Lack of any buying interest continued on Aug. 20 and into the end of the week. The Pro Farmer Tour estimated good yields in Nebraska and Indiana, above USDA’s August number for Indiana and well above the three-year average for Nebraska, likewise for Illinois and Iowa. The ethanol report showed a slight increase in corn use from the previous week, but stocks were also up and the needed weekly bushels continue to run well below USDA’s estimate. The fundamental outlook for corn is bearish and new-crop corn remains in a downtrend.

Ethanol production for the week ending Aug. 15 averaged 937,000 barrels per day, up 0.64 percent from the previous week. Total ethanol production for the week was 6.559 million barrels. Corn used in production the week ending Aug. 15 is estimated at 98.39 million bushels and needs to average 136.227 million bushels per week to meet this crop year’s USDA estimate of 5.075 billion bushels. Stocks were 18.251 million barrels, up 2.76 percent from the previous week.

The crop progress report has the corn rated at 72 percent good to excellent, 20 percent fair and 8 percent poor or very poor. Ratings were 61 percent, 26 percent and 13 percent, respectively, one year ago. Corn in the dough stage is at 70 percent versus 49 percent one year ago and a five-year average of 63 percent. Corn that is dented is at 22 percent versus 10 percent one year ago and a five-year average of 27 percent.

Soybeans

As of the Aug. 21 close, November soybeans were 13.75 cents lower for the week. At 10 a.m. Aug. 22, November soybeans were trading 7.5 cents higher.

Soybean trade was higher with light volume Aug. 18. Pro Farmer Tour has begun and early pod counts are mixed, but generally good. Growing conditions have been good overall so far for soybeans, and the near-term forecast looks favorable. Soybean trade was lower Aug. 19 and 20, as the Pro Farmer Tour’s results remained generally good. For the most part, pods were plentiful, but maturity was lagging in some areas. There is still room for weather to influence soybean yields, and the forecast looks favorable in the near term, though some areas need the rain to come soon. Aug. 19 trade reacted to the Aug. 18 crop progress report that showed soybeans blooming and setting pods ahead of the five-year average, while the good to excellent crop ratings increased 1 percent from the previous week. Demand remains solid with USDA announcing a sale of 110,000 metric tons of new-crop soybeans to Vietnam on Aug. 20.

Soybeans closed mixed Aug. 21 with strong gains in September, small gains in November, and small losses in most deferred months. The crop tour continues to find strong pod counts and generally lagging maturity. The weather outlook is improved for soybeans, with additional moisture, though below-normal temperatures in the north could pose a problem. Aug. 21 export sales were negative, but are seen as neutral with the year’s total still well above USDA’s projection.

Soybeans blooming were at 95 percent, compared with 92 percent the previous week and the five-year average of 95 percent. Soybeans setting pods were at 83 percent, compared with 72 percent the previous week and the five-year average of 79 percent. Conditions for soybeans were up 1 percent at 71 percent good to excellent, 23 percent fair and 6 percent poor or very poor.

Barley

As of Aug. 17, barley harvest was estimated at 31 percent complete, compared with 17 percent the previous week and 31 percent for the five-year average. Barley’s crop condition rating dropped 3 percent to 62 percent good to excellent, 30 percent fair and 8 percent poor or very poor.

Statistics Canada estimated Canada’s 2014 barley production at 392 million bushels (which was much lower than expected), compared with 470 million bushels last year.

The Aug. 21 cash feed barley bid in Minneapolis was at $2.50 per bushel, while malting bids were $5.50.

Durum

As of Aug. 17, 3 percent of North Dakota’s durum crop was harvested, compared with zero the previous week and 13 percent for the five-year average. North Dakota’s durum crop condition rating was 83 percent good to excellent, 16 percent fair and 1 percent poor, down 1 percent from the previous week.

Statistics Canada estimated Canada’s 2014 durum production at 182 million bushels (low end of estimates), compared with 239 million last year.

Aug. 21 cash bids for milling quality durum were at $8.75 per bushel in Berthold, N.D., while the Dickinson, N.D., bid was $8.60.

Canola

Canola futures on the Winnipeg, Manitoba, exchange closed the week ending Aug. 21 with almost $10 (Canadian) losses. Canola started the week with small gains, with support spilling over from a stronger U.S. soybean complex. Drought conditions in western Canada added support. But canola struggled for the rest of the week. Pressure came from weakness in the Chicago Board of Trade soy complex. The pressure was enough to push canola to a new low. Not even a friendly Statistics Canada report would be enough to change the direction of canola.

Statistics Canada estimated Canada’s 2014 canola production at 613.2 million bushels (which was much lower than expected), compared with 791.9 million for last year. Harvested acreage was estimated at 19.16 million, with a potential yield of 32 bushels per acre.

As of Aug. 17, North Dakota canola was 1 percent harvested, compared with zero the previous week and 10 percent for the five-year average. Canola’s crop condition rating decreased 1 percent to 87 percent good to excellent, 11 percent fair and 2 percent poor.

Aug. 21 cash canola bids in Velva, N.D., were $16.24 per hundredweight.

Dry edible beans

As of Aug. 18, North Dakota’s dry bean crop (40 percent of the nation’s crop) was 7 percent dropping leaves, compared with zero the previous week and 57 percent for the five-year average. North Dakota’s crop was rated 66 percent good to excellent, 26 percent fair and 8 percent poor or very poor, down 3 percent from the previous week. Minnesota’s crop (7 percent of the nation’s crop) was 80 percent setting pods, compared with 69 percent the previous week. Minnesota’s crop was rated 52 percent good to excellent, 35 percent fair and 13 percent poor or very poor, off 1 percent from the previous week. Nebraska’s crop (10 percent of the nation’s crop) was 86 percent setting pods, compared with 68 percent the previous week and 86 percent for the five-year average. Nebraska’s crop was rated 81 percent good to excellent, 15 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 79 percent setting pods, compared with 46 percent the previous week and 77 percent for the five-year average. Michigan’s crop was rated 75 percent good to excellent, 20 percent fair and 5 percent poor or very poor, unchanged from the previous week.

Sunflowers

As of Aug. 17, North Dakota’s sunflower crop was 77 percent in bloom, compared with 44 percent the previous week and 79 percent for the five-year average. North Dakota’s sunflower crop was rated 83 percent good to excellent, 16 percent fair and 1 percent poor, a 3 percent increase from the previous week.

Aug. 21 cash sunflower bids in Fargo, N.D., were at $17.30 per hundredweight. New-crop bids were $17.50.

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