USDA report bullish

Wheat

Wheat struggled last week but ended the week officially mixed. Most of wheat's strength was prompted by spill-over support from the corn and soybean markets. For the week ending Aug. 15, September Minneapolis gained 0.5 cents, September Chicago was up 4 cents, and September Kansas City lost 2.75 cents.

Wheat struggled to start last week as most traders stayed on the sidelines waiting for the release of the U.S. Department of Agriculture's August crop production report. The report was neutral to wheat, as it came in close to expectations. USDA's only change to wheat came in demand as exports were increased 25 million bushels to 1.1 billion bushels. This followed through to show up as a 25 million bushel cut in ending stocks, now estimated at 551 million bushels compared with expectations of 573 million bushels.

The Aug. 13 and 14 sessions saw a flip-flop of activity as Aug. 13 saw selling pressure while the Aug. 14 session erased most of the loss. Selling was because of spill over selling from a lower corn market. By the close, corn was sitting at 35-month lows while Chicago wheat was at a new low. Additional selling was tied to reports of harvest progress in the Northern Plains. Technical selling was seen to start Aug. 14 as the market traded down to three-year lows. But that also helped the markets to bounce late in the session. The cure for low prices is low prices. Buy stops were triggered once wheat hit its three-year low, which helped the grains to bounce.

Wheat traded in the Aug. 15 session with gains but not to the same extent as corn and soybeans. Wheat is in a tug of war between a stronger corn market (which is supportive) and harvest progress in the Northern Plains (which is bearish). Early harvest results have the spring wheat crop coming in with better than expected yields and good quality.

As of Aug. 11, winter wheat harvest was 92 percent complete compared with 87 percent the previous week, and 91 percent for the five-year average.

Spring wheat harvest is estimated at 6 percent compared with none the previous week and 24 percent for the five-year average. Spring wheat's condition rating declined 2 percent to 66 percent good to excellent, 26 percent fair and 8 percent poor to very poor.

Corn

Corn traded back and forth last week on mixed news. Support came from the USDA report, while a nonthreatening weather forecast limited buying interest. For the week ending Aug. 15, September gained 15 cents and December was up 19 cents.

Corn bounced higher Aug. 12 from what was seen as a bullish August USDA crop production report. The report took the market by surprise with a smaller yield and production number. USDA dropped corn's yield 2.1 bushels, to 154.1 bushels. This lowered production 187 million bushels to 13.763 billion bushels, both lower than last month and below estimates. U.S. ending stocks were estimated at 1.837 billion bushels, down from 1.959 billion bushels in July.

Pressure came back into the market Aug. 13 as corn traded lower because of the futures lack of follow-through buying. Traders do not seem convinced of the USDA numbers and remain focused on the weather, which is nonthreatening. The crop conditions also remained unchanged from the previous week and they usually start to drop by this time of year.

Corn traded slightly higher Aug. 14 and sharply higher on Aug. 15. Short covering came into play after trading to 36-month lows. The near-term weather also turned drier and hotter, which traders think will cause concerns to production. Additional support came from Farm Service Agency's first acreage report, which estimated preventative planted acres at 3.4 million acre for corn. FSA will update these numbers again on Sept. 17. There has been no correlation between FSA and National Agricultural Statistics Service acreage.

The crop progress report showed 94 percent of the corn is silking versus the five-year average of 95 percent. Corn that is in the dough stage was at 32 percent versus the five-year average of 48 percent. Corn that is dented was at 5 percent versus the five-year average of 17 percent. The condition is rated as 64 percent good to excellent, 25 percent fair and 11 percent poor to very poor.

Soybeans

Soybeans pushed higher last week because of the bullish surprise in USDA's August crop production report. For the week ending Aug. 15, September gained 69.75 cents while November was 83.25 cents higher.

Soybeans were trading higher Aug. 12 ahead of USDA's August supply and demand report. The report, released at 11 a.m., was bullish against expectations, supporting strong gains as the market closed near the day's highs. USDA announced sales of 713,000 metric tons of soybeans to China and 140,000

metric tons to unknown destinations, all for 2013 to '14 delivery.

The World Agricultural Supply and Demand Estimates report was seen as bullish, as yield and planted acreage were reduced from July's levels. The national average yield was pegged at 42.6 bushels per acre compared with 44.5 bushels per acre in July. Planted acreage was reduced to 77.2 million acres from 77.7 million acres in July. U.S. ending stocks for 2013 to '14 were at 220 million bushels, down from 295 million bushels in July and below trade estimates of 263 million bushels. World ending stocks for 2013 to '14 were reduced to 72.27 million metric tons from 74.12 million metric tons in July.

The bullish Aug. 12 report continued to provide support as soybeans closed higher on Aug. 13 and 14. Steady conditions in the Aug. 12 crop progress report limited buying on Aug. 13. The forecast remained nonthreatening, but concerns were beginning to grow because of lower overnight temperatures and too little rain for some drier areas. A sale of 110,000 metric tons of soybeans to China for 2013 to '14 delivery was announced Aug. 14.

Soybeans closed with strong gains Aug. 15 following the bullish USDA export sales report. The new crop exports were well above expectations which provided support to deferred contracts.

Additional support came when the FSA released preventative planted acreage data showing 1.6 million acres of soybeans went unplanted, which were much higher than traders had expected.

Soybeans setting pods were at 58 percent compared with 39 percent the previous week and 68 percent for the five-year average. Soybean's crop condition rating was unchanged at 64 percent good to excellent, 27 percent fair and 9 percent poor to very poor.

Barley

Barley's ending stocks estimate dropped 2 million bushels to 83 million bushels in USDA's August crop production report. The reduction was because of a 0.7 bushel cut in barley's potential yield (which accounted for 1 million bushels) and from a 1 million bushel decrease in barley imports.

USDA reported barley export shipments pace as of Aug. 9 at 42,000 bushels all going to China. There was no barley export sales reported.

As of Aug. 11, barley harvest was estimated at 17 percent complete compared with 4 percent the previous week and 21 percent for the five-year average. Barley's crop condition rating increased 1 percent to 66 percent good to excellent, 28 percent fair and 6 percent poor to very poor.

Cash feed barley bids in Minneapolis on Aug. 15 were at $3.90 per bushel, while malting barley bids were $6.15.

Durum

USDA increased durum's ending stocks estimate 3 million bushels, now estimated at 23 million bushels. This was done because of a 2 million bushel increase in durum's production estimate and from a 1 million bushel increase in durum imports.

USDA reported no durum export shipments or export sales for the week ending Aug. 9. As of Aug. 11, North Dakota's durum crop was 56 percent turning color compared with 46 percent the previous week and 56 percent for the five-year average. Durum's crop condition rating decreased 7 percent to 72 percent good to excellent, 25 percent fair and 3 percent poor.

Cash bids for milling quality durum on Aug. 15 were at $7.40 per bushel in Berthold, N.D., while Dickinson, N.D., bids were at $7.25.

Canola

Canola futures on the Winnipeg, Manitoba, exchange closed the week ending Aug. 15 with almost $16 (Canadian) gains. Canola traded with gains for most of last week with most of the strength spilling over from a sharply higher U.S. soybean complex. The U.S. soybean complex was supported by a surprising USDA crop production report, which cut U.S. production more than expected.

As of Aug. 11, North Dakota's canola was 59 percent turning color compared with 40 percent the previous week and 72 percent for the five-year average. North Dakota's canola crop condition rating increased 2 percent to 79 percent good to excellent, 17 percent fair, and 4 percent poor to very poor.

Cash canola bids in Velva, N.D., on Aug. 15 were at $22.39 per hundredweight.

Dry beans

As of Aug. 11, 87 percent of North Dakota's dry bean crop (29 percent of the nation's production) was blooming compared with 79 percent the previous week and 98 percent for the five-year average. Pod setting was estimated at 59 percent complete compared with 84 percent for the five-year average. North Dakota's crop condition rating was unchanged at 54 percent good to excellent, 36 percent fair and 10 percent poor to very poor. Minnesota's dry beans (11 percent of the nation's production) were 93 percent bloomed compared with 85 percent the previous week. Minnesota's dry bean crop condition rating increased 5 percent to 61 percent good to excellent, 31 percent fair and 8 percent poor.

USDA's August crop production report showed that all dry bean production is down 23 percent from last year. The class breakdown for acreage is as follows: Navy beans (14 percent of dry beans produced) off 25 percent from last year, Pinto beans (37 percent) off 27 percent from last year and black bean acreage (12 percent) off 23 percent from last year.

Sunflowers

As of Aug. 11, 37 percent of North Dakota's sunflower crop was in bloom compared with 16 percent the previous week and 66 percent for the five-year average.

North Dakota's sunflower crop condition rating declined 1 percent to 76 percent good to excellent, 21 percent fair and 3 percent poor.

Cash sunflower bids Aug. 15 in Fargo, N.D., for old crop was at $20.90 per hundredweight while new crop bids were $21.