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Markets Weaker on Improved Conditions

Plantings are wrapping up in timely fashion and condition ratings improved this week

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Weekly Crop Progress Update Comments

  • Corn plantings are nearly wrapped up at 97% complete.
  • The US corn condition improved to 75% good to excellent, up from 74%.
  • Soybean plantings advanced to 86% complete, ahead of the 79% average.
  • Conditions came in at 72% good to excellent, up from 70% last week.
  • Cotton was 78% planted with conditions at 43% good to excellent, down marginally from 44% last week.
  • Winter wheat harvest was 7% complete, in line with the average.
  • Spring wheat plantings are wrapping up.
  • The crop was rated at 82% good to excellent, up from 80% last week.

FBN’s Take On What It Means: No major concerns are present for the U.S. crop outlook at this point. Plantings are wrapping up in a timely fashion now and condition ratings improved for the week. The current tropical storm should bring rains from Louisiana to Iowa, which is viewed as a net benefit for the crop. Winter wheat yields are mixed in the early days of harvest but weather is overall favorable for harvest conditions.

AgRural Cuts Brazil’s Second-Season Corn Forecast

  • The agency trimmed production to 69.4 million tonnes, citing dryness.
  • That marked a third time the agency cut production.
  • Parana appears to be the state where yield prospects were cut the most.
  • Last year, Brazil cut 73.2 million tonnes of second-season corn, according to the agency’s report.
  • The trade is on average expecting USDA to show a smaller corn crop for Argentina+Brazil in its Thursday report.

FBN’s Take On What It Means: The smaller crop total for Brazil is a net benefit for the US but the cut may not be large enough to induce much additional interest in US corn. Another plus is that the Brazilian real has been gaining, which makes US corn more competitive. But, as Brazil’s harvest kicks into gear, we could see export interest turn to the major exporter if its export prices weaken. While smaller South American crops are generally a positive for the US, the cut for Brazil’s current crop along with its stronger currency is probably not enough to alter the current burdensome situation the US faces for 2020.

The risk of trading futures, hedging, and speculating can be substantial. FBN BR LLC (NFA ID: 0508695)

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