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Mikkel Pates/Agweek

Uncertainty causing volatility in markets


The wheat complex enjoyed an explosive day in July 11 trade with notable cuts to world production estimates in the monthly World Agricultural Supply and Demand Estimates report. U.S. ending all wheat stocks for 2019-20 were 1 billion bushels versus 1.038 billion bushels as the average trade guess. All wheat production is estimated at 1.921 billion bushels versus the 1.905 billion bushels average estimate and 1.903 billion bushels in the June report.

World ending stocks for 2019-20 are estimated at 286.5 million metric tons versus the average guess of 292 million metric tons. This was an 8 million metric tons cut from last month's estimates with the Russian crop reduced 3.8 million metric tons to 74.2 million metric tons. The European Union, Canada, Ukraine, Australia and China all had notable cuts in wheat production estimates.

Spring wheat production is estimated at 572 million bushels versus the average guess of 569 million bushels. This is 8.2% less than 2018 production of 623 million bushels with acreage reduced 770,000 to 12.1 million acres. U.S. durum acreage was 37% lower from 1.075 million acres in 2018 to 680,000 acres. Winter wheat production is estimated at 1.29 billion bushels, up 16.1 million bushels from last year. Oklahoma had the most notable cut, while Montana and Colorado had the most significant increases.

Spring wheat headed is at 56% compared to 73% for the five-year average. Barley conditions improved 1% and oat conditions remained unchanged with both of those crops also 20% and 16% behind average heading percentages.

Winter wheat harvest advanced to 47% complete this week from 30% last week. This compares to 61% for the five-year average. Despite relatively good yield reports coming out of the Kansas City crop with OK quality, soft red wheat is reporting lower test weights and higher vomitoxin levels.

We've seen a $1.75 move higher in the dollar since June 25 to the $97.12 level. The dollar did retreat from these levels midweek. The June 18 high of $97.265 will now serve as resistance. If the dollar breaks above $97.265 and in particular $97.715, it will limit wheat upside.

For the week ending July 11, September contracts for Minneapolis wheat were up 6.25 cents at $5.4125, up 6.5 cents at $5.215 for Chicago wheat, and up 16.25 cents at $4.615 for Kansas City wheat.


The corn market reacted with buying to an overall bearish report that added stocks. It appears that the trade does not believe the U.S. Department of Agriculture's attempt to keep a lid on prices with its higher than expected yield estimates and planted acreage. Current resistance for December is $4.53 with support at $4.3025.

USDA left the U.S. corn yield estimate unchanged from the June report at 166 bushels per acre. The average guess was that they would trim 1.2 bushels to 164.8. The 166 bushel per acre estimate equates to U.S. corn production at 13.875 billion bushels as harvested acres were unchanged from the June 30 planting intentions report at 83.6 million. USDA has stated that they will revise acre numbers in the August report.

U.S. ending stocks for 2019-20 are estimated at 2.01 billion bushels versus the average trade guess of 1.663 billion bushels. U.S. ending stocks for 2018-19 were revised upwards with 100 million bushel cut to exports, a 25-million-bushel cut to feed and residual and a 20-million-bushel cut to food, seed and industrial use. Ending stocks for 2018-19 are now estimated at 2.34 billion bushels. This 145 million bushel increase was carried forward into 2019-20 ending stocks with another 195 million bushels increase in expected production. U.S. ending stocks to use ratio for 2019-20 is now at 14.1%.

World ending stocks for 2019-20 are estimated at 298.9 million bushels versus the average guess of 291.1 million metric tons. World ending stocks for 2018-19 were 328.75 million metric tons versus 325.38 million metric tons in the June report. Argentina corn production was increased 2 million metric tons to 51 million metric tons while Brazil production was left unchanged at 101 million metric tons.

Russian and Ukrainian corn is set to enter the pollination period with around half of the Russian and two-thirds of the Ukrainian corn growing areas considered moisture deficient. The European model calls for favorable rainfall over most of this area in the next 10 days. The GFS model has the southern portion of this region missing the rains. But overall much of the Former Soviet Union corn growing area is favored for rain during this critical timeframe.

Corn conditions improved 1% to 57% good to excellent which was what the market was expecting. The crop is rated 31% fair and 12% poor to very poor. Corn silking is 8% versus 22% for the five-year average.

Weekly ethanol production declined sharply last week to 1.047 million barrels per day, but this is typical over the Fourth of July week. Production will need to run roughly 1.103 million barrels per day over the next eight weeks to meet USDA's current 5.45 billion bushel corn for ethanol usage estimate. Despite the production decline, ethanol stocks increased to 23.009 million barrels. This is 2.8% higher than last year and are record stocks for the first week of July. U.S. gasoline demand is tracking 0.1% behind last calendar year's pace.


Soybean futures saw nice gains this week as crop conditions continue to worsen and the USDA came out with a neutral to slightly bullish report for soybeans. The USDA lowered yields 1 bushel to 48.5 bushels per acre. Production was close to expectations and came in at 3.845 billion bushels, down from 4.15 billion bushels in the June report. This is based off 80 million planted acres and 79.2 million harvested acres.

Ending stocks for 2018-19 were lowered 20 million bushels to 1.05 billion bushels. Ending stocks for 2019-20 were lowered 250 million bushels to a 795 million bushel carryout. Pre-report estimates averaged 812 million bushels and estimates ranged from 558 million bushels to 1.04 billion bushels.

U.S. exports for 2019-20 were lowered 75 million bushels to 1.875 billion bushels. World stocks for 2019-20 were lowered 8.2 million metric tons to 104.5 million metric tons. This was well below the pre-report average estimates of 110.7 million metric tons. This reduction was mainly based off of U.S. production issues.

Brazil's production was raised a whopping 6 million metric tons to 123 million metric tons and well above the expectations of no change in production. Argentina soybean production was lowered 3 million metric tons to 53 million metric tons.

For the week ending July 7, soybean crop conditions were lowered 1% to 53% good to excellent from the week prior and compared to 71% good to excellent last year. This is a seven-year low for soybean ratings (2012). Soybeans blooming came in at 10% versus 44% last year and 32% for the five-year average. This could mean more soybeans will be trying to bloom in the heat during the dog days of summer. Soybeans emerged came in at 90% versus 100% last year and 98% for the five-year average.

Soybeans planted for the week ending June 30th was 96% complete versus 100% last year and 99% for the five-year average. This was below the average estimate of 97% complete. This means there were still 3.2 million acres of soybeans left that farmers still say they intend to plant. This is based off the USDA's 80 million acres intended acreage estimate. These acres are supposed to only include acres that farmers still intend to plant, not acres that they have decided to take prevented planting on already. There is also a lot of talk of replant in the eastern Corn Belt.

First support is the bottom end of the gap left in November soybean futures at $8.58 to $8.645 on May 25. The November contract low of $8.155 set on May 13 recovery is major support.

Soybeans are trying to break through major resistance at $9.3125 on the weekly chart. On the daily charts, resistance is $9.34 and then the 10-month high of $9.71 for new crop soybeans that was set on Dec. 12.


For the week ending July 11, canola futures were down $1.50 at $447.20 Canadian per metric ton. The July Canadian dollar was up .0003 at 0.7665. The Canadian dollar is currently rangebound between the July 5 high of $76.81 and the July 10th low of $76.16. This brings the U.S. price to $15.55 per hundredweight.

• Velva, N.D., $14.31 per hundredweight, September at $14.31.

• Enderlin, N.D., no bid, September at $14.31.

• Hallock, Minn., $14.85 per hundredweight, September at $14.67.

• Fargo, N.D., $14.95 per hundredweight, September at $14.75.


Cash feed barley bids in Minneapolis were at $3.25, while malting barley received no quote. Berthold, N.D., bid is $2.75 and CHS Southwest New Salem, N.D., bid is at $3.


Cash bids for milling quality durum are $5 in Berthold and at $4.80 in Dickinson, N.D.


Cash sunflower bids in Fargo were at $17.70, with September bids at $17.70.

For the week ending July 11, soybean oil was up 62 cents at $28.18 on the August contract.