USDA Report Worksheet, Weather and Possible Heat Dome - Thursday, 28 June 2018

Update for June 28th, 2018

 

Trade war issues have traders and the crop markets all wondering what to expect as we move further into the season with primarily favorable weather and beautiful crops growing in the fields.  The latest crop conditions ratings from the USDA were glowing and aside from the possible development of a heat dome the weather right now is not threatening to the crop as there are several opportunities for continued widespread rainfall. So in other words the forecast the market bulls have been waiting for is still nowhere to be seen. In addition there has been talk out of Washington that there may be new restrictions placed on Chinese investments in the U.S. This type of action from the U.S. will likely spark additional retribution from Chinese leaders.

AgroConsult recently completed a crop tour across Brazil’s 4 largest corn producing states. Following the tour the group has reduced their May corn yield estimate of 57 million tons down to 55.2 million tons, these figures are down sharply from the 67.3 million tons grown in 2016/17.  This reduction in yield estimates is due to planting delays and prolonged drought conditions in a widespread region of the country.

The USDA will announce their much anticipated June Acreage and Stocks in all Positions Reports this Friday, June 29th.  The graph below includes the average trade estimate, range of trade estimates and actual figures from the June 2017 report for comparison.

 

U.S. Quarterly Grain Stocks (billion bu.)

 

 

USDA
June 2018

Average Trade Est.

Range of

Trade Est.

USDA

June 2017

Corn

 

5.268

5.004-5.500

5.229

Soybeans

 

1.225

1.115-1.305

0.966

Wheat

 

1.091

1.042-1.190

1.181

 

USDA June Acreage (million acres)

 

USDA June 2018

Average Trade

Est.

Range Of

Trade Est.

USDA

Mar 2018

Corn

 

88.562

87.600-90.436

88.026

Soybeans

 

89.691

89.100-90.700

88.982

Wheat

 

47.124

46.575-47.932

47.339

All Winter

 

32.633

31.469-33.100

32.708

Spring Wheat

 

12.431

12.000-13.000

12.627

Durum Wheat

 

2.030

1.996-2.119

2.004

 

 

 

U.S. corn has received some non-traditional corn demand from the global market.  This demand is a result of diminished production in other corn producing countries like Brazil and Ukraine where grain exports are expected to be 4 million metric tons lower than one year ago.  While some of this demand can be substituted for alternative grains (mainly feed), corn usage is still expected to increase. If the demand grows at the rate expected it is possible that stocks could drop to 10% or below.  If this is correct, analysts foresee stock to use levels falling to levels not seen since the 2013/14 marketing year.

 

The USDA crop rating this week still has corn rated at 77% GD/EX as we approach the first week in July.  In addition 5% of the corn in the silking stage vs the 5 year average of 3% at this date.  Some of the states indicating that their corn crop is running ahead of schedule are a few of the big production states like Illinois, Indiana and Nebraska. 

 

Some notable states showing improved conditions:

  • South Dakota +4% to 72% GD/EX vs 80% a year ago
  • Michigan +3% to 72% GD/EX vs 67% last year
  • Illinois +2% to 81% GD/EX vs 62% a year ago
  • Texas +2% to 41% GD/EX vs 70% last year
  • North Dakota + 1% to 82% GD/EX vs 56% last year

Notable states that saw conditions deteriorate:

  • Kansas -6% to 75% GD/EX vs 75% a year ago
  • Minnesota -4% to 84% GD/EX vs 78% last year
  • Iowa -3% to 81% GD/EX vs 79% last year
  • Ohio -1% to 86% GD/EX vs 58% a year ago

 

The U.S. soybean crop is also flourishing with 73% of the nation’s crop rated Good to Excellent which is the highest ever on record for this point in the season. They also report that 12% of the soybean crop is blooming compared to the 5 year average of just 5%.  It appears that any concerns regarding the over-abundance of moisture and soybeans dislike of “wet feet” is being over-shadowed by the expectation of a +500,000 to 1,000,000 acre increase in soybean acres in the USDA Acreage Report due out tomorrow. AgroConsult is forecasting that producers in Brazil will plant an addition +2 million acres of soybeans this next season.

Notable states showing improved conditions:

  • South Dakota +4% to 65% GD/EX vs 39% last year
  • Nebraska + 3% to 85% GD/EX vs 70% a year ago
  • Illinois +1% to 78% GD/EX vs 70% a year ago
  • Missouri + 1% to 45% GD/EX vs 64% last year

Notable states where conditions worsened:

  • Kansas -4% to 52% vs 69% last year
  • Minnesota -4% to 79% vs 76% a year ago
  • Ohio -4% to 77% vs 60% last year
  • Indiana -3% to 77% GD/EX vs 51% last year
  • Wisconsin -3% to 84% GD/EX vs 74% a year ago
  • Iowa -1% to 79% GD/EX vs 74% last year

The most recent GFS and Euro weather models both point to a possible major ridge (a.k.a. heat dome) over the eastern Corn Belt and northeastern U.S. during the first week in July bringing potentially record breaking heat. A heat wave is defined as a 3 day stretch where temperatures reach 90 degrees F or above. This particular heat wave looks to have the potential to last up to 5 days.  If this occurs it could be the most widespread and hottest early July weather that we have seen since 2012.

 

While hot and dry conditions are always concerning during pollination the fact that this region has received above normal rainfall this growing season removes some of those fears. The Subsoil Moisture map below gives a good visualization to  see where the stressed crop areas of the U.S. are located.

 

 

The Short to Very Short key with percentages is difficult to read. The percentages that match us with the colors are as follows with the Pale Yellow indicating where soil moisture is in most plentiful supply to Dark Red indicating where soil moisture is very low:

0-10%  Pale Yellow

10-20%  Dark Yellow

20-30%  Gold

30-40%  Light Orange

40-50%  Bright Orange

50-60%  Red

60-70% Dark Red

 

The NOAA maps below show us the temp and precipitation outlooks for July 2nd through July 8th

 

 

CROP PROGRESS REPORT

 

 

Corn Silking - Selected States

[These 18 States planted 92% of the 2017 corn acreage]

-----------------------------------------------------------------

                 :            Week ending            :          

                 :-----------------------------------:          

      State      : June 24,  : June 17,  : June 24,  : 2013-2017

                 :   2017    :   2018    :   2018    :  Average 

-----------------------------------------------------------------

                 :                    percent                   

                 :                                              

Colorado ........:     -         (NA)          -           -    

Illinois ........:     2            -          2           1    

Indiana .........:     2         (NA)          2           1    

Iowa ............:     -         (NA)          -           -    

Kansas ..........:     7            3         13           8    

Kentucky ........:    18            3         16           9    

Michigan ........:     -         (NA)          -           -    

Minnesota .......:     -         (NA)          -           -    

Missouri ........:     6         (NA)         11           6    

Nebraska ........:     -            -          2           -    

North Carolina ..:    56           23         47          51    

North Dakota ....:     -         (NA)          -           2    

Ohio ............:     1         (NA)          -           -    

Pennsylvania ....:     -         (NA)          -           -    

South Dakota ....:     -         (NA)          -           -    

Tennessee .......:    34            8         33          18    

Texas ...........:    56           52         57          53    

Wisconsin .......:     -         (NA)          -           -    

                 :                                              

18 States .......:     4         (NA)          5           3    

-----------------------------------------------------------------

-    Represents zero.                                           

(NA) Not available.                                             

 

Corn Condition - Selected States: Week Ending June 24, 2018

[These 18 States planted 92% of the 2017 corn acreage]

----------------------------------------------------------------------------

      State     : Very poor :   Poor    :   Fair    :   Good    : Excellent

----------------------------------------------------------------------------

                :                          percent                         

                :                                                          

Colorado .......:     2           6          17          65          10    

Illinois .......:     1           2          14          54          29    

Indiana ........:     1           4          19          56          20    

Iowa ...........:     1           3          15          57          24    

Kansas .........:     4           9          32          48           7    

Kentucky .......:     -           1          12          74          13    

Michigan .......:     1           3          24          53          19    

Minnesota ......:     -           2          14          59          25    

Missouri .......:     2          14          38          41           5    

Nebraska .......:     -           1          13          70          16    

North Carolina .:     4          14          31          45           6    

North Dakota ...:     -           2          16          71          11    

Ohio ...........:     -           2          12          59          27    

Pennsylvania ...:     1           9          27          53          10    

South Dakota ...:     1           3          26          59          11    

Tennessee ......:     -           2          21          57          20    

Texas ..........:    12          13          34          35           6    

Wisconsin ......:     1           2          10          54          33    

                :                                                           

18 States ......:     1           4          18          58          19    

                :                                                          

Previous week ..:     1           3          18          59          19    

Previous year ..:     2           6          25          55          12    

----------------------------------------------------------------------------

-  Represents zero.                                                        

 

Soybeans Emerged - Selected States

[These 18 States planted 96% of the 2017 soybean acreage]

-----------------------------------------------------------------

                 :            Week ending            :          

                 :-----------------------------------:          

      State      : June 24,  : June 17,  : June 24,  : 2013-2017

                 :   2017    :   2018    :   2018    :  Average 

-----------------------------------------------------------------

                 :                    percent                   

                 :                                              

Arkansas ........:     93         94           96         86    

Illinois ........:     96         93           97         92    

Indiana .........:     89         94           97         91    

Iowa ............:     95         97           99         92    

Kansas ..........:     85         84           91         78    

Kentucky ........:     80         71           82         72    

Louisiana .......:     99         99          100         96    

Michigan ........:     91         77           85         95    

Minnesota .......:    100         96           97         94    

Mississippi .....:     95         94           96         93    

Missouri ........:     88         87           93         75    

Nebraska ........:     98         97           99         96    

North Carolina ..:     77         66           78         71    

North Dakota ....:     97         88           97         92    

Ohio ............:     94         88           94         93    

South Dakota ....:    100         91           98         94    

Tennessee .......:     78         71           81         69    

Wisconsin .......:     93         88           95         90    

                 :                                              

18 States .......:     93         90           95         89    

-----------------------------------------------------------------

 

Soybeans Blooming - Selected States

[These 18 States planted 96% of the 2017 soybean acreage]

------------------------------------------------------------------------

                :               Week ending               :            

                :-----------------------------------------:            

      State     :  June 24,   :  June 17,   :  June 24,   :  2013-2017 

                :    2017     :    2018     :    2018     :   Average  

------------------------------------------------------------------------

                :                        percent                       

                :                                                      

Arkansas .......:     58             42           57            35     

Illinois .......:      6              3           23             3     

Indiana ........:      2           (NA)            8             3     

Iowa ...........:      2           (NA)            4             2     

Kansas .........:      4              -            7             1     

Kentucky .......:      2           (NA)            3             1     

Louisiana ......:     74             65           73            56     

Michigan .......:      2           (NA)            1             1     

Minnesota ......:      1           (NA)            2             1     

Mississippi ....:     60             40           54            34     

Missouri .......:      6           (NA)            4             3     

Nebraska .......:      6              2           14             6     

North Carolina .:      3           (NA)            5             2     

North Dakota ...:      1           (NA)            1             4     

Ohio ...........:      1           (NA)            6             1     

South Dakota ...:      5              -            2             3     

Tennessee ......:      5              3           13             3     

Wisconsin ......:      -           (NA)            -             1     

                :                                                       

18 States ......:      8           (NA)           12             5     

------------------------------------------------------------------------

-    Represents zero.                                                  

(NA) Not available.                                                     

 

Soybean Condition - Selected States: Week Ending June 24, 2018

[These 18 States planted 96% of the 2017 soybean acreage]

----------------------------------------------------------------------------

      State     : Very poor :   Poor    :   Fair    :   Good    : Excellent

----------------------------------------------------------------------------

                :                          percent                         

                :                                                           

Arkansas .......:     2           7          24          47          20    

Illinois .......:     1           3          18          56          22    

Indiana ........:     2           5          22          55          16    

Iowa ...........:     1           3          17          59          20    

Kansas .........:     1           8          39          47           5    

Kentucky .......:     -           1          13          72          14    

Louisiana ......:     2          10          33          42          13    

Michigan .......:     1           3          22          58          16    

Minnesota ......:     -           2          19          59          20    

Mississippi ....:     -           2          27          56          15    

Missouri .......:     3          12          40          41           4    

Nebraska .......:     -           3          12          71          14    

North Carolina .:     2           7          37          47           7    

North Dakota ...:     -           2          18          70          10    

Ohio ...........:     1           4          18          57          20    

South Dakota ...:     1           6          28          58           7    

Tennessee ......:     -           2          16          66          16    

Wisconsin ......:     1           3          12          56          28    

                :                                                          

18 States ......:     1           4          22          58          15    

                :                                                          

Previous week ..:     1           4          22          58          15    

Previous year ..:     2           6          26          56          10    

----------------------------------------------------------------------------

-  Represents zero.                                                        

 

 

 

 

U.S. corn has received some non-traditional corn demand from the global market.  This demand is a result of diminished production in other corn producing countries like Brazil and Ukraine where grain export

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