Yield Outlook & Trade - Friday, 03 August 2018

Update for August 3rd, 2018

Prices have varied widely this week as reports out of Washington offer promise and then not and as yields, crop conditions and weather remain unknown as well. There are a wide range of corn yield estimates being reported this season by scouts these figures are running anywhere from a low of 164 bushels per acre to a high of 184 bushels per acre. It’s too soon to know for sure but some forecasts point towards drier conditions and temps turning a bit hotter than previously forecast through the Midwest during the first couple weeks of August. (older maps shown in weather section below with cooler and wetter outlooks) Exports remain strong and ahead of last year’s numbers partially thanks to production issues in parts of the EU and shipping problems in South America. Demand for ethanol remains high as well and we have a massive livestock herd in the U.S.  providing strong demand for corn. The USDA left the weekly crop conditions overall Good to Excellent corn crop rating at 72% for the 3rd consecutive week. One interesting thing to note in this week’s rating is several of the top corn producing states saw conditions deteriorate while other states saw conditions improve…how will that correlate to bushels?

States that saw conditions deteriorate:

  • Iowa, Nebraska, North Dakota and Michigan declined by -1%
  • Illinois, Missouri, Wisconsin declined by -2%
  • Indiana and Kansas declined by -3%
  • Kentucky -9%
  • Tennessee -10%

States that saw conditions improve:

  • Pennsylvania +15%
  • Colorado +6%
  • South Dakota and Texas +4%
  • North Carolina +3%
  • Minnesota +1%

Soybean export numbers showed continued strength despite the lack of Chinese buying.  Last week’s weekly inspections from the USDA showed +740,000 MT’s which is up about +50% from a year ago. Argentina crushers are looking to purchase U.S. soybeans and there is talk that Argentina may become the world’s second largest importer of soybeans in 2018 coming in only behind China. This would be a huge boost for U.S. soybean exports that could help offset some of the uncertainty caused by the trade conflicts. The USDA also left the soybean Good to Excellent crop rating unchanged this week at 70%. 

States showing a decline in conditions:

  • Tennessee -10%
  • Louisiana and Missouri -8%
  • Arkansas and Kentucky -5%
  • Illinois, Kansas and Ohio -3%
  • North Dakota, Wisconsin and Minnesota -1%

States that showed some improvement:

  • North Carolina +9%
  • Mississippi +5%
  • South Dakota +4%
  • Michigan +3%
  • Iowa +1%

Yield estimates have been coming in from various scouts and firms including the well-respected firm FC Stone. Estimates from the firm show an average U.S. soybean yield of 51.5 bushels per acre which is 3 bushels higher than what the USDA is currently using in balance sheets. Their estimated average corn yield sits at 178.1 bushels per acre and a crop of 14.56 billion bushels. This is 320 million bushels more than the USDA July estimate.  A map of both corn and soybean yield estimates by state according to FC Stone is shown below.

 

 

 

Reports indicate that the U.S. and Mexico are close to reaching a final deal on the rules of origin section of NAFTA as it relates to the automotive rules. Once this portion of the NAFTA negotiation is finalized it will assist in wrapping up all talks by the end of the month.  According to senior Canadian officials any final deal will be trilateral in nature.

While NAFTA looks to be headed in a positive direction our trade situation with China unfortunately does not look so rosy. On Tuesday the market rallied as rumors of a quick compromise with China surfaced which we all learned the next morning was false. It’s become quite clear that it will take time and patients for our countries to find some common ground to agree upon. It was recently figured that the actual true cost to all of the manufacturers, farmers and fishermen negatively affected by the new tariffs including steel and aluminum hits $39 billion. Estimates are that the U.S. automobile, motorcycle and parts manufacturers would need close to $7.6 billion alone.

Some long-range forecasts had been showing intense heat building over the Corn Belt during the next two weeks but the outlook is unclear at this point with some forecasts changing to a more moderating outlook through mid-month.  The Plains are still expected to have above average temperature though through mid-August. The 5 day precipitation outlook shown in the second map indicates that the Upper Midwest and Nebraska should expect around an inch of rain with up to 2 inches predicted for central Iowa.

 

 

 

CROP CONDITIONS

 

Corn Silking - Selected States

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

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                 :            Week ending            :          

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

      State      : July 29,  : July 22,  : July 29,  : 2013-2017

                 :   2017    :   2018    :   2018    :  Average 

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

                 :                    percent                   

                 :                                               

Colorado ........:    62          55           73         57    

Illinois ........:    92          97          100         92    

Indiana .........:    81          86           93         84    

Iowa ............:    89          88           96         82    

Kansas ..........:    81          83           92         85    

Kentucky ........:    89          86           91         85    

Michigan ........:    67          46           68         71    

Minnesota .......:    76          77           92         77    

Missouri ........:    95          95          100         92    

Nebraska ........:    89          82           91         88    

North Carolina ..:    98          94           97         97    

North Dakota ....:    58          63           86         57    

Ohio ............:    76          79           88         77    

Pennsylvania ....:    67          52           67         75    

South Dakota ....:    75          76           92         75    

Tennessee .......:    98          95           96         96    

Texas ...........:    92          85           89         92    

Wisconsin .......:    55          53           76         60    

                 :                                              

18 States .......:    82          81           91         82    

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Corn Dough - Selected States

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

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

                :               Week ending               :            

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

      State     :  July 29,   :  July 22,   :  July 29,   :  2013-2017 

                :    2017     :    2018     :    2018     :   Average  

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

                :                        percent                       

                :                                                       

Colorado .......:      2             1             9             1     

Illinois .......:     32            33            64            30     

Indiana ........:     22             6            34            16     

Iowa ...........:     17             7            31            17     

Kansas .........:     28            34            49            29     

Kentucky .......:     40            32            45            31     

Michigan .......:      4             1             9             5     

Minnesota ......:     11             3            23            10     

Missouri .......:     51            51            73            42     

Nebraska .......:     16            22            38            17     

North Carolina .:     84            63            77            81     

North Dakota ...:      3             -            11             1     

Ohio ...........:     14             5            26            12     

Pennsylvania ...:      3             2             9            11     

South Dakota ...:      9            10            34             9     

Tennessee ......:     66            64            78            63     

Texas ..........:     61            65            71            68     

Wisconsin ......:      3             -             8             3     

                :                                                      

18 States ......:     21            18            38            20     

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

-  Represents zero.                                                    

 

Corn Condition - Selected States: Week Ending July 29, 2018

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

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

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

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

                :                          percent                          

                :                                                          

Colorado .......:     2           8          28          49          13    

Illinois .......:     1           4          15          51          29    

Indiana ........:     3           6          22          51          18    

Iowa ...........:     2           4          16          54          24    

Kansas .........:     8          15          30          39           8    

Kentucky .......:     1           5          20          62          12    

Michigan .......:     6          12          34          39           9    

Minnesota ......:     2           4          15          53          26    

Missouri .......:    12          19          36          28           5    

Nebraska .......:     1           2          11          56          30    

North Carolina .:     9          28          34          26           3    

North Dakota ...:     -           1           9          67          23    

Ohio ...........:     2           5          22          52          19    

Pennsylvania ...:     -           1          15          61          23    

South Dakota ...:     2           4          19          53          22    

Tennessee ......:     3           5          18          56          18    

Texas ..........:    15          16          33          30           6    

Wisconsin ......:     1           4          14          50          31    

                :                                                           

18 States ......:     3           6          19          50          22    

                :                                                          

Previous week ..:     3           6          19          50          22    

Previous year ..:     4           9          26          48          13    

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-  Represents zero.                                                        

 

Soybeans Blooming - Selected States

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

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

                :               Week ending               :            

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

      State     :  July 29,   :  July 22,   :  July 29,   :  2013-2017 

                :    2017     :    2018     :    2018     :   Average  

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

                :                        percent                       

                :                                                      

Arkansas .......:     94            93            97            83     

Illinois .......:     86            88            92            80     

Indiana ........:     79            80            85            78     

Iowa ...........:     83            81            90            81     

Kansas .........:     71            74            83            62     

Kentucky .......:     59            52            64            55     

Louisiana ......:     97            98            99            94     

Michigan .......:     78            61            74            79     

Minnesota ......:     84            74            88            83     

Mississippi ....:     93            91            94            87     

Missouri .......:     67            69            78            56     

Nebraska .......:     86            78            87            84     

North Carolina .:     64            49            57            52     

North Dakota ...:     77            86            95            83     

Ohio ...........:     75            78            86            75     

South Dakota ...:     77            68            82            80     

Tennessee ......:     83            72            84            68     

Wisconsin ......:     71            66            79            71     

                :                                                       

18 States ......:     80            78            86            77     

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

 

Soybeans Setting Pods - Selected States

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

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

                :               Week ending               :            

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

      State     :  July 29,   :  July 22,   :  July 29,   :  2013-2017 

                :    2017     :    2018     :    2018     :   Average  

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

                :                        percent                       

                :                                                      

Arkansas .......:     79            78            86            63     

Illinois .......:     48            66            77            41     

Indiana ........:     44            53            66            46     

Iowa ...........:     49            40            63            44     

Kansas .........:     25            30            48            23     

Kentucky .......:     37            30            41            30     

Louisiana ......:     93            88            95            85     

Michigan .......:     42            21            37            38     

Minnesota ......:     40            35            59            41     

Mississippi ....:     81            77            84            63     

Missouri .......:     32            32            43            22     

Nebraska .......:     44            40            50            41     

North Carolina .:     39            21            29            28     

North Dakota ...:     45            44            68            46     

Ohio ...........:     38            41            58            32     

South Dakota ...:     38            29            50            40     

Tennessee ......:     50            38            55            40     

Wisconsin ......:     37            26            45            35     

                :                                                      

18 States ......:     45            44            60            41     

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

 

Soybean Condition - Selected States: Week Ending July 29, 2018

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

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

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

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

                :                          percent                         

                :                                                          

Arkansas .......:     3          10          28          46          13    

Illinois .......:     3           4          18          50          25    

Indiana ........:     2           6          25          50          17    

Iowa ...........:     1           4          18          56          21    

Kansas .........:     6          15          36          39           4    

Kentucky .......:     2           4          18          66          10    

Louisiana ......:     2          12          34          41          11    

Michigan .......:     5          11          30          47           7    

Minnesota ......:     1           5          19          53          22    

Mississippi ....:     -           4          20          62          14    

Missouri .......:     7          18          35          35           5    

Nebraska .......:     1           3          11          58          27    

North Carolina .:     2           9          36          47           6    

North Dakota ...:     1           2          15          70          12    

Ohio ...........:     2           4          29          49          16    

South Dakota ...:     2           5          24          54          15    

Tennessee ......:     1           4          21          57          17    

Wisconsin ......:     1           4          16          50          29    

                :                                                           

18 States ......:     2           6          22          53          17    

                :                                                          

Previous week ..:     2           6          22          52          18    

Previous year ..:     4           9          28          49          10    

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-  Represents zero.                                                        

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