Morning Comments August 7, 2017
Monday, August 7, 2017, 8:08 AM
Submitted by: Landus Cooperative
Good morning, hope you all had a great weekend!
With a market that is contingent on the weather, that’s the main topic of conversation when it comes to what the market is doing, so we’ll start with that! Corn futures traded lower last week on forecasts for below normal temperatures across the cornbelt through mid-August. The impact of above normal temps and dryness in parts of the WCB and Illinois is now showing up with significant tip-back noted in the affected areas. Although the trade is expecting yield to come in at 166 bu/ac on the August 10th WASDE report, down from 170.7 bu/ac, there are ideas that persistent dryness in 25% of the cornbelt could potentially reduce the U.S. corn yield to 161-163 which could provide underlying support for the market.
Similarly, with the soybean market, major change in the U.S. weather pattern to much cooler for the next couple of weeks is a major player in why November futures lost a whopping 56.25 cents last week. These cooler temps across the cornbelt will help minimize stress on the soybean crop during the critical pod setting/pod filling stage of development. U.S. weather was hot and dry during July in parts of the WCB and excessively wet in areas of the ECB, which challenged soybean crop ratings.
The trade was caught off guard last Monday after the crop conditions report showed soybeans improving 2% in the good/excellent category, instead of falling the 1-2% that was expected. Soybean crop ratings as of the end of July were at 59% G/E, which is the lowest since the drought of 2012, when ratings were 29% G/E. Corn ended July with 61% G/E rating, since 2012 the average G/E rating for corn has been 63.7%. The trade is expecting anywhere between 1% up to 1% down on the conditions report tomorrow. They are apparently covering all the angles this week after what happened last week.
Strength overnight is attributed to funds positioning before the report on Thursday. The trade is calling for firmer markets ahead of Thursday’s USDA report.
Please don't forget about the town hall meetings around your area in the next week, we'd love to hear your feed back! Specific information about the meeting in your area can be found on LandusCooperative.com or by calling your local Landus Cooperative office.
Thank you for your business and have a great day!