GRABANSKI: Weather forecast does not threaten crops

Wheat
Wheat had another rough week, sliding lower as the harvest in Kansas and the southern Plains rapidly progresses with a record hard red winter wheat yield of 50.5 bushels per acre. Kansas City and Chicago wheat have hit new contract lows.
U.S. Wheat Associates released a harvest report indicating 12.1 percent moisture and 10.7 percent protein averages across a multiple sample area. Projected hard red winter wheat production is at 1.51 billion bushels, up 10 percent from the 2015 crop. There were reports of a number of elevators running out of room and using temporary storage bunkers effectively widening basis levels.
Russian wheat export prices fell in anticipation of the largest wheat crop since the break-up of the USSR. Production estimates of 64.5 million tons are up from 61 million in 2015. Black Sea prices for 12.5 percent protein wheat were at $181 per metric ton, down $3 from last week. Concerns remain about quality in the southern regions, as they have had excessive moisture lately. France and Britain also have expressed concerns about quality with recent heavy rains.
The Australian Bureau of Agriculture, Resource Economics and Rural Sciences estimated the Australian Wheat crop at 25.4 million tons, roughly 5 percent below private estimates. ABARES says the area planted to wheat is forecast to decline, as other crops such as pulses have been more profitable to plant. A couple of private forecasts stated 26.1 and 26.7 million tons, respectively.
The USDA estimates a price range for $3.60 to $4.40 per bushel in the 2016 to ’17 marketing year.
The June 20 crop progress report pegged winter wheat conditions at 61 percent good to excellent (unchanged) and 9 percent poor to very poor (unchanged). Winter wheat harvest is 25 percent complete, compared to 17 percent last year and 28 percent average. Texas is 55 percent complete, compared to 59 percent last year and 63 percent average. Oklahoma 55 percent complete, compared to 52 percent last year and the 69 percent average. Arkansas is 81 percent complete, compared to 63 percent last year and the 69 percent average.
Spring wheat conditions are rated at 76 percent good to excellent, down 3 percent from the last week; and 4 percent poor to very poor, up 2 percent from last week. Last year was 71 percent good to excellent and 4 percent poor to very poor. These conditions are substantially better than last year and the five-year average.
For the week ending June 23, July contracts for Minneapolis wheat were down 8.5 cents at $5.21, down 17.75 cents at $4.55 for Chicago wheat, and down 22.25 cents at $4.29 for Kansas City wheat.
Corn
Corn had an ugly week, as rains across the Midwest and in the eastern Corn Belt and drove the market down below $4. Corn lost more than 50 cents last week after reaching new contract highs June 17.
July corn posted its lowest close in more than a month after rains fell in the eastern Corn Belt from northern Illinois to Ohio. Temperatures are expected to be milder with chances of rain in central Plains.
For the week ending June 23, July corn was down 50.5 cents and December traded down 51 cents for the week. Corn was also down in the June 23 trade after the Brexit vote.
In a surprise move, the United Kingdom voters decided to leave the European Union and threw stocks around the world into a tailspin. The U.S. dollar gained more than 200 points and drove markets down around the world. The uncertainty for U.S. corn crop acres in the U.S. Department of Agriculture’s Acreage Estimate on June 30 will offer the next direction.
Expiring July options and end-of-the-quarter bookkeeping also added to the volatility. Liquidation started after the crop condition ratings were better than expected, and traders hit some sell stops as the gap was hit at the $4.20 mark, and additional selling pressure followed for the December contract.
USDA’s Crop Condition Report showed conditions were unchanged, and as good as the previous week. Corn conditions are better than last year at this time. Good to excellent is at 75 percent, fair is at 21 percent, and poor to very poor is at 4 percent. This shows a lot of corn around the country has taken off like it did last year.
Export inspections came in at 48.36 million bushels, giving us another good week of inspections. Shipments now total 1.277 billion bushels, down 7 percent from last year. We are still behind what is needed to meet USDA estimates, but have gained ground the past month or so. Weekly export sales of corn showed a total of 55.9 million bushels with 34.3 million bushels for the 2015 to ’16 marketing year. This was well above the 2.9 billion bushels needed to be on pace with USDA’s revised June demand projection of 1.825 billion bushels.
Soybeans
The week ending June 17 was healthy, but that did not continue last week. Both old- and new-crop contracts struggled, as trade unwound the last dollar or so of the rally. As is typically the case this time of year, weather has been noted as the catalyst for the market moves, with recent wet forecasts pushing prices lower.
There were a few other factors influencing soybeans trade last week. Soymeal traded about $24 lower for the week. Soybean oil traded lower early in the week but rallied late to finish only near unchanged. The U.S. Dollar Index traded back-and-forth as Brexit prediction polls waffled between “leave” and “remain,” but as of June 23, before voting results were released, the net change was about 20 points lower at 93.30, with the week’s high just above 94 and the week’s low just above 93. Of course, the July options expiration at the end of the week also had its say in market action.
The next big question is how many acres of soybeans going to add in the June 30 report. The previous week, Informa revised their estimate to a 1.6 million acre increase, bringing total soybean acres to 83.8 million. A USDA official at a London conference said he wasn’t sure soybeans would get a large increase, though. There is a lot of discussion in the market about what the report will show, but ultimately we won’t know until the end of June.
Export sales were decent last week, coming in at 24.3 million bushels for 2015 to ’16 and 24.3 million bushels for next year. Total commitments are now 1,834.6 million bushels, well above USDA’s projection. But, export shipments are only up to 1,616 million bushels with the June 20 report pegging inspections at 11.6 million bushels. That is a decent weekly pace, but with only about 10 weeks to go, shipments need to be about 13.5 million bushels per week to meet the 1,760 million bushels projected.
The June 20 crop progress report stated, as of June 19, soybean conditions at 73 percent good to excellent, down 1 percent from the previous week, up 8 percent from last year, 5 percent poor to very poor, up 1 percent from the previous week and down 3 percent from last year at this time. Planting was 96 percent complete, compared to 93 percent average. Emergence was 89 percent, compared to 84 percent average. As of June 12, soybean planting was 92 percent complete, compared to 87 percent average. Emergence was 79 percent, compared to 72 percent average and 72 percent last year. Conditions were 74 percent good to excellent, up 2 percent from the previous week and up 7 percent from this time last year; and 4 percent poor to very poor, unchanged week over week and down 2 percent from this time last year.
For the week ending June 23, the July contract was down 19 cents at $11.25. New-crop November contracts traded down 31.25 cents at $11.01.
Canola
Canola July futures in Winnipeg, Manitoba, traded down $26.86 (Canadian) to $473.20 per metric ton (Canadian) for the week ending June 23. The Canadian dollar traded up 0.01 to 0.78 for the week ending June 23. This brings the U.S. price to $16.82 per hundredweight.
Cash bids in Velva, N.D., were $16.34 per hundredweight for June and $16.34 for September. Enderlin, N.D., bids were $16.97 for June and $16.76 for September. The bids in Hallock, Minn., were $16.67 for June and $16.28 for September. Fargo, N.D., bids were $16.80 for June and $16.83 for September.
The heavy sell-off in the soybean market and the higher Canadian Dollar contributed to this week’s losses. In addition to the general turmoil in the global financial markets brought on by the Brexit vote, canola was also pressured by the relatively favorable crop conditions seen across Western Canada.
Stats Canada releases its acreage estimates June 29, and positioning ahead of the report is also weighing on canola prices. Average trade guesses are calling for an increase in canola area from the 19.3 million acres forecast earlier in the year.
Barley
Cash feed barley bids in Minneapolis were $2.35, while malting barley received no quote. Berthold, N.D., showed bids of $2.25 and CHS Southwest bid $2.70 in New Salem, N.D.
As of June 19, barley conditions were 77 percent good to excellent, down 1 percent from the previous week and up 1 percent from this time last year; and 3 percent poor to very poor, unchanged from the previous week and down 2 percent from this time last year.
Durum
Cash bids for milling quality durum are $6.25 in Berthold, N.D., and unchanged at $6.35 in Dickinson, N.D.
Sunflowers
Cash sunflower bids in Fargo, N.D., were at $17.30 for June and $18 October to December.
Soybean oil traded down 18 cents this week ending June 23 to $31.75 on the July contract.
As of June 19, planting was 87 percent complete, compared to 77 percent average. North Dakota is 98 percent complete, compared to 86 percent average. South Dakota is 80 percent complete, compared to 70 percent average.