Better conditions pressure market

Wheat

Wheat traded mixed on the Independence Day short week. For the week ending July 3, September Minneapolis dropped 5 cents, September Chicago gained 7.25 cents and September Kansas City gained 4 cents. Minneapolis was under pressure from improving crop conditions, while the winter wheat contracts experienced a seasonal post-harvest rally.

Wheat opened the short week mixed, as traders are not quite sure which horse to back. On one hand, you have harvest activity keeping pressure on the winter wheat contracts. Yields so far have been all over the board, but the fact that new crop bushels are coming in is bearish.

The June 28 negative U.S. Department of Agriculture acreage and stocks report added selling pressure, as did the lower corn market. But wheat was able to trim session losses late with a friendly export inspections estimate and technical buying.

The July 2 session had wheat higher because of technical buying. Wheat has been struggling, so a little push was not unexpected, especially ahead of a holiday. Position squaring ahead of the Fourth of July was short lived, as the buying spurt ended around midsession. This brought in a light round of selling. The winter wheat exchanges were the best performers, as harvest progress is advancing at a good pace and harvest selling pressure is starting to slow down.

Wheat trade was mostly higher July 3, as traders positioned ahead of the July 4 holiday. The winter wheat harvest should be passing halfway complete, and should finish quickly with good weather. Yields in Kansas continue to come in with a wide range, from very bad to very good. USDA announced a sale of 360,000 metric tons of soft red winter wheat to China for 2013 and 2014 delivery, providing support to the market.

USDA's export inspections for wheat were estimated at 26.4 million bushels for the week ending June 28. Wheat export sales pace was estimated at 21.8 million bushels. Last week was the fourth week (48 weeks left) for wheat's 2013 export marketing year. USDA's expectations are at 975 million.

As of June 30, winter wheat harvest was 43 percent complete, compared with 20 percent the previous week and 52 percent for the five-year average. Winter wheat's crop condition rating improved 2 percent to 34 percent good to excellent, 24 percent fair and 42 percent poor to very poor. Spring wheat emergence was estimated at 93 percent, compared with 90 percent the previous week and 99 percent for the five-year average. Heading is estimated at 18 percent, compared with zero the previous week and 32 percent for the five-year average.

Spring wheat's crop condition rating declined 2 percent to 68 percent good to excellent, 27 percent fair and 5 percent poor to very poor.

Corn

The corn market was under pressure last week, as traders digested the quarterly USDA report. Selling interest entered the futures last week, as USDA posted an acreage number that will be the largest in 77 years. The weather was also nonthreatening and the longer-term forecast looks favorable for development of the crop. For the week ending July 3, September dropped 15 cents, while December was down 8.25 cents.

Corn was under pressure to start the week with selling spilling over from the June 28 bearish USDA report. Traders were surprised by the corn acreage number in the report and more focus will now be on the yield. The International Grain Council also raised its global corn production estimate to 946 million metric tons and stocks are expected to be at a 13-year high of 146 million metric tons. USDA is estimating world production at 962.6 million metric tons and stocks at 151.8 million.

The July 2 session closed with small gains from short covering after eight straight lower closes in the new crop contracts. Selling interest re-entered the trade the last two trading days of the week. End of the week pressure came from an improvement in the corn crop condition rating and traders expecting the same this week. The ethanol report was disappointing. Talk of more wheat being used in U.S. feed rations and reports that China was buying U.S. wheat also added pressure.

Ethanol production for the week ending June 28 averaged 863,000 barrels per day, down 2.5 percent from the previous week. Corn used in production is estimated at 90.6 million bushels and this crop year's cumulative corn used for ethanol production is 3.72 billion bushels. Corn use needs to average 96.06 million bushels per week to meet this crop year's USDA estimate of 4.6 billion bushels. Stocks as of June 28 were 15.45 million barrels, down 5.2 percent from the previous week.

The crop progress report showed 3 percent of the corn is silking versus 22 percent one year ago and a five-year average of 9 percent. The condition is rated as 67 percent good to excellent, 25 percent fair and 8 percent poor to very poor.

USDA's export inspections for corn were estimated at 14.8 million bushels for the week ending June 28. Corn export sales pace was estimated at a combined total of 12.4 million bushels, with 9.2 million old crop. With eight weeks left in the marketing year, shipments need to average 12.1 million bushels and sales need to average 70,000 to make USDA's expectations of 700 million bushels.

Soybeans

Old crop soybeans continue to push prices in an attempt to ration tight supplies, while improving weather conditions put pressure on the new crop contracts. For the week ending July 3, August gained 10.25 cents and November dropped 1.25 cents.

Soybeans closed lower to start the week with the selling still tied to the June 28 bearish acreage report. Expectations that crop conditions would improve and a forecast for favorable weather added pressure. The August contract closed higher, as the strong basis and tight supplies continued to support old crop contracts. Planting progress and crop conditions were both near trade expectations. USDA's export inspections were neutral, coming close to the level needed to keep pace with USDA's projection.

The July 2 session was quiet ahead of the July 4 holiday. The July 1 crop progress report showed improved crop conditions, as expected. The fundamental outlook for new crop soybeans remains bearish, as the weather forecast looks good for crop development. Old crop soybeans continue to draw support from the strong basis and tight supplies.

Soybeans were higher in slow trade July 3 ahead of the early close at noon for the July 4 holiday. Old crop stocks are extremely tight, supporting the nearby contracts. That support spills over to new crop contracts that were higher, despite the longer-term fundamental outlook for new crop remaining bearish. In all, trading was thin, as most of the traders' attentions were focused more on position squaring ahead of the holiday.

USDA reported soybean export inspections pace for the week ending June 28 at 4.5 million bushels. Soybean export sales pace was estimated at a combined 13.6 million bushels, with 4.4 million being old crop and 9.2 million new crop. With nine weeks left in the marketing year, shipments are within 44 million bushels of USDA pace, while sales have exceeded USDA's expectations of 1.33 billion bushels.

Planting progress as of June 30 had 96 percent of the U.S. soybean crop planted, compared with 92 percent the previous week and the five-year average of 98 percent. Soybean emergence as of June 30 was at 91 percent, compared with 81 percent the previous week and the five-year average of 94 percent. USDA's weekly crop condition rating report estimated the U.S. soybean crop at 67 percent good to excellent, 26 percent fair and 7 percent poor to very poor.

Barley

USDA reported barley export shipment pace for the week ending June 28 at 10,000 bushels, with 8,000 bushels going to Mexico and 2,000 bushels to Korea. No barley export sales were reported for the week.

As of June 30, 97 percent of the nation's barley had been planted, compared with 93 percent the previous week and 99 percent for the five-year average. Barley emergence was estimated at 94 percent, compared with 91 percent the previous week and 98 percent for the five-year average. Barley's crop condition rating declined 1 percent to 68 percent good to excellent, 28 percent fair and 4 percent poor to very poor.

July 3 cash feed barley bids in Minneapolis were at $4.85 per bushel, while malting barley bids were $6.85.

Durum

USDA reported durum export shipment pace for the week ending June 28 at 433,000 bushels. No durum export sales were reported for the week.

As of June 30, 96 percent of North Dakota's durum crop was planted, compared with 93 percent the previous week and 94 percent for the five-year average.

Durum emergence was at 83 percent, compared with 81 percent the previous week and 91 percent for the five-year average. Durum's crop condition rating improved 3 percent to 80 percent good to excellent, 17 percent fair and 3 percent poor.

July 3 cash bids for milling quality durum were at $7.75 per bushel in Berthold, N.D., while Dickinson, N.D., bids were at $7.95.

Canola

Canola futures on the Winnipeg, Manitoba, exchange closed the week ending July 4 with minor losses. Pressure came from good growing conditions and a slowdown in domestic demand. Losses were kept in check from technical buying, as most contracts traded to short-term support lines. Trading was thin because of a short trading week in the U.S. markets.

As of June 30, 90 percent of North Dakota's canola crop had been planted, compared with 85 percent for the previous week and 96 percent for the five-year average. Emergence was at 78 percent, compared with 64 percent for the previous week and 96 percent for the five-year average. Canola's crop condition rating dropped 2 percent to 72 percent good to excellent, 23 percent fair and 5 percent poor to very poor.

July 3 cash canola bids in Velva, N.D., were at $23.58 per hundredweight.

Dry beans

As of June 30, 90 percent of North Dakota's dry bean crop had been planted, compared with 88 percent the previous week and 100 percent for the five-year average.

North Dakota's crop condition rating improved 3 percent to 54 percent good to excellent, 38 percent fair and 8 percent poor to very poor. Minnesota's dry beans are 92 percent emerged, compared with 77 percent the previous week and 99 percent for the five-year average. Minnesota's dry bean crop condition rating dropped 4 percent to 58 percent good to excellent, 35 percent fair and 7 percent poor.

Sunflowers

As of June 30, 90 percent of the nation's sunflower crop was planted, compared with 78 percent the previous week and 95 percent for the five-year average.

USDA estimated soybean oil export sales pace for the week ending June 28 at 1.6 trillion metric tons. This brings the year-to-date export sales pace for soybean oil to 888.8 trillion metric tons, compared with 488.5 trillion last year.

July 3 old crop cash sunflower bids in Fargo, N.D., were at $23 per hundredweight, while new crop bids were $23.50.