Today’s Spotlight Market
The major cash crops in the U.S. are looking nearly picture perfect in much of the Midwest as the weekly crop progress report continues to show high crop condition rating overall. On Monday afternoon the USDA reported that the U.S. Corn crop was rated 74% good to excellent. While the rating did slip 2% from the previous week the conditions are still very good overall. Soybeans were rated 72% good to excellent unchanged from the previous week.
Fundamentals
So far the month of August has been rather uneventful for grain traders as we head into the dog days of summer. However, we should start to see some excitement as we head towards Friday with the USDA scheduled to release the August Crop Production and Supply/Demand report at 11 am Central Time. The August report is particularly important to traders as it is the first report of the growing season that takes into account actual field observations. Given the reports of overall excellent crop conditions analysts are raising their estimates for production and average yields for both Corn and Soybeans.
For Corn, traders are looking for the USDA to increase production to nearly 14.8 billion bushels up about 250 million bushels from the July estimate. Average Corn yields are expected to increase to near 171.0 bushels per acre vs. 168.0 bushels per acre in July. Soybeans are also expected to see increases in both yields and production totals with analysts looking at a Soybean crop of 3.950 billion bushels vs. 3.880 billion bushels in August. Average yields are expected to have increased by nearly 1 bushel per acre to 47.6 bushels per acre. While the production estimates seem to favor the bear camp, the demand side of the picture may give Corn and Soybean bulls something to hang some hope on especially for Soybeans where U.S. export sales have been strong due to less competition from South American producers who experienced disappointing production totals this past season.
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