Weather Forecast



Erin Brown/Grand Vale Creative

Funds are trading on average crop potential


The spring wheat tour completed its three-day trek across North Dakota and western Minnesota. Final yield was 43.1 bushels per acre, up 2 bushels per acre from last year's 41.1 bushels per acre. The tour sampled 356 fields. Durum yields were 7.3 bushels per acre lower than last year at 32 bushels per acre. Durum acreage declined 37% this year and scouts noted the smaller sample size. Scouts also noted that maturity is roughly one to two weeks behind normal.

The second day of the spring wheat tour calculated an estimate of 39.7 bushels per acre versus 41.1 bushels per acre last year. The first day showed 43.1 bushels per acre versus 38.9 bushels per acre last year.

Spring wheat conditions remained unchanged from the previous week at 76% good to excellent, 20% fair and only 4% poor to very poor. The crop is 92% headed compared to 94% average. Winter wheat harvest is at 69% versus 79% average. Oats conditions had a notable decline of 4%.

Weekly export sales were a high for the year at 660,000 metric tons (24.2 million bushels) which was above market expectations of 200,000 to 450,000 metric tons. Japan had the largest sale at 143,000 metric tons. Total commitments of 313 million bushels are running 25% ahead of last year. Weekly export inspections were within estimates at 15.9 million bushels (433,000 metric tons). Egypt purchased 300,000 metric tons from Romania, Ukraine and Russia with no U.S. business. There was a report out stating that Asian mills have been purchasing U.S. and Canadian spring wheat aggressively.

Russian wheat crop estimates continue to decline. SovEcon lowered its Russian wheat crop estimate 2.9 million metric tons to 73.7 million metric tons. This compares to UkrAgroConsult lowering the Russian wheat crop estimate from 80 million metric tons to 76.7 million metric tons. The U.S. Department of Agriculture is currently at 74.2 million metric tons.

The U.S. dollar surged higher all week reaching $97.65. The May 23 contract high in the September contract of $97.715 is now in jeopardy. The Canadian dollar on the charts looks like it is about to roll over as $76.16 short term support failed to hold.

For the week ending July 25, September contracts for Minneapolis wheat were down 6.25 cents at $5.23, down 3 cents at $4.995 for Chicago wheat, and down 2.5 cents at $4.375 for Kansas City wheat.


The corn market moved lower this week as demand destruction is becoming evident after the June move to five-year highs. The 2018-19 U.S. corn demand is a stunning 720 million bushels below USDA's August 2018 forecast. Both exports and ethanol grind had very poor numbers this week.

Weekly corn exports were horrible at just 121,000 metric tons (4.8 million bushels) which was lower than meager market expectations. Combined corn sales over the last eight weeks are only 59 million bushels or 7.4 million per week average. This compares to last year's same time period average of 22.7 million bushels. Total commitments of 1.958 billion bushels are down nearly 16% from last year. Corn sales need to average 15 million bushels per week through August, otherwise another downside revision in exports appears likely. Corn export inspections were the second lowest total for the marketing year at 17.2 million bushels, which was also well below expectations.

Weekly ethanol production was 7.273 million barrels, down 2.53% versus last week and down 3.26% versus last year. This was the lowest production rate in 11 weeks. Analysts are estimating that the weekly production numbers will have to run 3% to 4% higher than last year through the end of August to meet USDA's 5.450 billion bushel corn for ethanol usage number. This seems unlikely, which would result in USDA lowering the corn for ethanol demand number. There are instances of ethanol plants curtailing production in the eastern Corn Belt and other areas that had higher abandonment acres, as plants are struggling to source corn.

Ethanol stocks continue to trend higher to 23.689 million barrels (995 million gallons) when we typically see a seasonal decline through the fall. Stocks are now 9.4% higher than last year's same week level of 909 million gallons. This is the highest number in 16 weeks. U.S. gasoline demand is running 0.3% lower than last year's calendar year demand.

Corn conditions declined 1% to 57% good to excellent. Trade was expecting a 59% rating. Corn silking is 35% versus 66% average. Corn in the dough stage is 5% versus 10% average. The supply side of the equation is still much in doubt with a well-behind-average crop and uncertainty over just how many acres were planted during the late spring. USDA has stated that the acre number will be clarified in the Aug. 12 monthly Supply and Demand report. A USDA Risk Management Agency official stated that prevented planting acres could be as high as 15 million to 20 million.

Another round of Market Facilitation Payments was announced. Producers affected by natural disasters who filed prevented planting claims and then planted an MFP-eligible cover crop, with the potential to be harvested or for subsequent use as forage, qualify for a $15-per-acre payment. Acreage of cover crops must be planted by Aug. 1 to be considered eligible. County payment rates can be found at


Soybean futures saw more losses this week, as the weather has been favorable for crop development the past couple weeks. Above-normal temperatures in the six-to-10- and eight-to-14-day forecasts may also start giving this market a boost if rains don't accompany the high temperatures. Normal rainfall is projected in the extended forecasts, but they look spotty. Soybean crop conditions on July 21 were unchanged at 54% good to excellent from the week prior and compared to 70% good to excellent last year. Average analyst estimates were expecting unchanged to a 1% increase in ratings. The crop is also rated 34% fair and 12% poor to very poor. Soybeans blooming came in a 40% versus 76% last year and 66% for the five-year average. Soybeans setting pods came in at 7% versus 41% last year and 28% for the five-year average.

Exports continue to disappoint as the USDA announced a prior sale of 3.7 million bushels (100,000 metric tons) of soybeans to unknown was canceled for 2018-19, meaning the weekly export sales number was also negative as there were no sales reported to counter these cancellations.

U.S. Trade Representative Robert Lighthizer and senior U.S. officials will travel to Shanghai on July 29 for face-to-face trade meetings with Chinese officials. There has been a handshake truce since the G20 meetings last month, but there have been no face-to-face meetings since. It was being reported that China was going to start purchasing ag products as a goodwill gesture, but that has not come to fruition.

Bloomberg reported on July 24 that "the Chinese government has given the go-ahead for five companies to buy up to 3 million tons (100.22 million bushels) of U.S. soybeans free of retaliatory import tariffs as trade negotiations between the two nations continue." This could be the goodwill gesture ahead of the trade meetings that we have been waiting for, but it is hard to get excited until the sales are actually made official. There may not be huge initial purchases from Chinese soybean crushers though. Crush margins are poor in China, and U.S. soybeans are still at a premium to Brazil's huge soybean crop and may be that way until later this fall.

Agriculture Secretary Sonny Perdue announced farmers hurt by the trade war with China will be paid a minimum of $15 per acre under the $16 billion aid package to be unveiled before the end of this week. The new package will have a single payment rate per county, calculated by the damages in that area, instead of a rate for every commodity across the nation.

Support is the month and a half low of $8.9025. Major 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 the contract low.

Front month soybean resistance is $9.3125 on the weekly chart. On the daily charts, November soybeans 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 25, November canola was down $0.70 at $448.90 Canadian per metric ton. The Canadian dollar was down .0011 at 0.76. This brings the U.S. price to $15.48 per hundredweight.

• Velva, N.D., $14.26 per hundredweight, September at $14.26.

• Enderlin, N.D., No bid, September at $14.26.

• Hallock, Minn., $14.80 per hundredweight, September at $14.62.

• Fargo, N.D., $14.95 per hundredweight, September at $14.60.

The September support of $76.16 for the Canadian dollar was broken this week.


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., is $3.


Cash bids for milling quality durum are $4.75 in Berthold and at $4.70 in Dickinson, N.D.


Cash sunflower bids in Fargo were at $17.85. October bids were at $17.

For the week ending July 25, soybean oil was up 17 cents at $28.33 on the August contract.