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Grabanski: Crop tour influences markets

Wheat Wheat traded the first couple sessions last week under the gun, but shook off the negativity and traded with small gains to end the week. For the week ending Aug. 20, September Minneapolis slipped 5.5 cents, September Chicago dropped .25 ce...

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Wheat
Wheat traded the first couple sessions last week under the gun, but shook off the negativity and traded with small gains to end the week. For the week ending Aug. 20, September Minneapolis slipped 5.5 cents, September Chicago dropped .25 cents, and September Kansas City gave back 8.5 cents.
The first few sessions of the week brought selling pressure to wheat. Selling was tied to the thought that good progress should have been made on spring wheat harvest because of hot, dry conditions. Wheat tried to stage a slight recovery once the U.S. Department of Agriculture released its weekly export inspections estimate showing shipments were higher than needed to keep pace with USDA’s export projections. Light support also spilled over from a steady corn and soybean complex, which was waiting to see the outcome of the Corn Belt tour. By the close, wheat could not hold strength as technical selling combined with pressure from a stronger U.S. dollar. Selling spilled over into the Aug. 18 session, with additional pressure from a bearish crop progress report, which showed improving spring wheat conditions and a faster-than-expected spring wheat harvest pace.
Cooler heads surfaced Aug. 19. Wheat opened lower, with most of the selling tied to reports of abundant supplies of wheat around the world. Though there were concerns about the potential size of the U.S. winter wheat crop brought on by drought in the Southern Plains and rain at harvest in the Corn Belt, the potential record-breaking spring wheat crop has more than made up for the shortfall. Fundamentals remain bearish, as there is enough wheat in the world, but technically this market is oversold and in need of a correction. This was enough to push wheat to end the session steady to slightly higher.
It looks as if the bloodletting in the wheat market could be slowing. Wheat was under attack all week, as traders hammer all three exchanges in an attempt to price the better-than-expected production estimates from the Northern Plains. Technically, wheat needs a bounce, as most contracts have traded to or through recent lows. Spring wheat harvest is past the 50 percent mark. This is usually the time when wheat stages a post-harvest rally.
Technically, wheat could stage a 50- to 70-cent recovery, which would equal a 50 percent retracement from recent high to recent low.
For the week ending Aug. 15, USDA estimated wheat’s export shipments pace at 20.6 million bushels. This brings wheat’s year-to-date shipments pace to 151.5 million bushels, compared with 190.4 million last year. Wheat’s export sales pace was estimated at 11.6 million bushels. This brings export sales pace for the year to 340.2 million bushels, compared with 399.2 million bushels last year. To make USDA’s export pace of 925 million bushels, wheat shipments need to average 18.9 million bushels and wheat sales need to average 14.3 million bushels.
As of Aug. 16, 53 percent of the nation’s spring wheat crop was harvested, compared with 28 percent the previous week and 31 percent for the five-year average. Spring wheat’s crop condition rating increased 1 percent to 70 percent good to excellent, 22 percent fair and 8 percent poor or very poor.
Corn
The corn market closed slightly higher last week, and has quietly added 25 cents since Aug. 12. Support came from the crop tour conversations about issues with the eastern crop.
The weather forecast remained the focus, and was generally favorable, with moderate temperatures and moisture expected to continue. As of the Aug. 20 close, the December contract was up 7 cents for the week. The futures lacked buying interest to start the week, and lost a couple cents. The forecast calls for cooler weather and widespread rain.
There was trade talk with the Farm Service Agency report that showed 2.3 million acres of prevented-planting for corn, but these numbers will continue to be updated, and USDA will not use them until this fall. The Pro Farmer tour started, and there are issues in Ohio, but the crop in South Dakota looked good.
The corn market ended with small gains on Aug. 18. Support came from the 1 percent drop in good to excellent crop conditions, putting corn at 69 percent good to excellent, but still well above the 63 percent average.
The Pro Farmer tour reported issues with the crop in the East on its first day, but the crop looked good in the west. Corn closed with modest gains Aug. 19, with support tied to the crop tour. The tour was in Indiana and Nebraska on Aug. 20, and projected yields in both states below current USDA estimates. Three of four states on the tour came in below the USDA estimate so far, with Iowa, Illinois and Minnesota remaining. Corn closed with decent gains Aug. 18, with support coming from a report that Mexico bought 193,000 metric tons of corn. Export sales report was decent, but shipments lag. The Pro Farmer tour is showing variability in yields in the East, especially Ohio and Indiana, but a better crop in Iowa, Minnesota and South Dakota, which have more than double the acres of the troubled states.
For the week ending Aug. 16, the crop was 69 percent good to excellent, 21 percent fair and 10 percent poor to very poor. Corn in the dough stage was 71 percent, compared with 68 percent last year and 66 percent for the five-year average. Corn that was dented was 21 percent, versus 20 percent last year and 28 percent for the five-year average.
USDA’s export inspection report was bearish for corn at 35 million bushels, below the 82 million bushels needed to meet USDA’s projection. For the week ending Aug. 15, corn export sales were estimated at 11.1 million bushels, slightly above the needed amount to meet USDA’s estimate of 1.85 billion bushels for the year.
Shipments were 36.1 million bushels, below the 60.4 million bushels needed to keep pace with USDA.
Soybeans
As of the Aug. 20 close, November soybeans were 9.25 cents lower for the week. Early Aug. 21, November soybeans were down 13.5 cents.
Soybeans traded both sides of unchanged Aug. 17 before closing with small gains. FSA released numbers pegging prevented-planting soybeans at 2.17 million acres, nearly half of which are in Missouri.
Export inspections Aug. 17 were good for this time of year, and above the amount needed to keep pace with USDA. The National Oilseed Processors Association released July crush numbers Aug. 17, reporting 145.23 million bushels of soybeans crushed in July, a new record, and more than expected. Soy oil stocks at the end of July were at 1.62 billion pounds, more than expected.
Soybean trade was lower Aug. 18 and 19, setting new contract lows. The first day of the Pro Farmer Crop tour found above-average pod counts in South Dakota, and below average counts in Ohio. The second day of the tour was mixed, finding above-average counts in Nebraska and below-average in Indiana. The crop progress report showed blooming just behind the five-year average, and pod-setting right at the average. Conditions were unchanged, at 63 percent good to excellent.
After setting new contract lows overnight, the soybean market rebounded Aug. 20, closing with gains. Support came from buyers taking advantage of the low prices.
The Aug. 20 morning’s export sales report was decent, adding to a total well above USDA’s projection for the year. Despite the export sales report, export business was quiet, in part because of ongoing concerns about China’s economy. Day three of the crop tour was in Illinois, and found pod counts down 8 percent from last year.
Aug. 20 was the final day of the tour, and focused on Iowa and Minnesota, finding above-average pod counts.
For the week ending Aug. 15, USDA reported the soybean export inspections pace at 13.8 million bushels. This brings the year-to-date export shipments pace for soybeans to 1.815 billion bushels, compared with 1.588 billion last year at this time.
The soybean export sales pace was estimated at 1.7 million bushels. This brings soybean’s export sales to 1.865 billion bushels, compared with 1.693 billion bushels last year. Shipments need to average 5 million bushels, and sales have exceeded USDA’s 1.825-billion-bushel estimate.
For the week ending Aug. 16, soybean blooming was at 93 percent, compared with 88 percent the previous week and the five-year average of 95 percent.
Soybeans setting pods were 79 percent, compared with 69 percent the previous week, and a five-year average of 79 percent. Soybeans were 63 percent good to excellent, 26 percent fair and 11 percent poor or very poor.
Barley
The year-to-date export shipments pace for barley is at 278,890 bushels, compared with 1,521,174 bushels last year. For the week ending Aug. 15, barley export sales were reported at 700,000 bushels. This brings the year-to-date export sales pace for barley to 1.1 million bushels, compared with 1.7 million bushels last year at this time.
For the week ending Aug. 16, the barley harvest was 66 percent complete, compared with 42 percent the previous week and the five-year average of 32 percent. Barley conditions were 65 percent good to excellent, 26 percent fair and 9 percent poor or very poor.
Aug, 20 cash feed barley bids in Minneapolis were $2.40 per bushel.
Durum
For the week ending Aug. 16, USDA reported the durum export inspections pace at 1.55 million bushels. Durum export sales were reported at 800,000 bushels. This brings the year-to-date export sales pace for durum to 16.3 million bushels, compared with 6.9 million bushels.
For the week ending Aug. 20, cash bids for milling durum were $6.75 per bushel in Berthold, N.D., while the Dickinson, N.D., bid was at $6.50 per bushel.
Canola
For the week ending Aug. 20, the November canola contract lost $8.20 to $478.30 (Canadian).
For the week ending Aug. 10, cash canola bids in Velva, N.D., were $15.20 per hundredweight.
Sunflowers
For the week ending Aug. 15, USDA estimated the export sales pace for soybean oil at 7.1 thousand metric tons. This brings the year-to-date export sales pace to 862.2 thousand metric tons, compared with 821.6 thousand metric tons last year.
For the week ending Aug. 20, August soybean oil futures were $1.10 lower to $27.98 per hundredweight. Cash sunflower bids in Fargo, N.D., were $17.60 per hundredweight.

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