Morning Comments August 14, 2018
Tuesday, August 14, 2018, 8:08 AM
Submitted by: Landus Cooperative
Corn +1 to +2
Beans +6 to +8
Corn found a little strength overnight, trading up a couple of cents with soybeans up as well.
The crop progress report showed corn down 1% in the Good to Excellent rating, 70% vs. 71% last week. Soybeans also lost 1%, now at 66% vs. 67% last week. Both were was within trade expectations.
There isn’t a lot of fresh news on the horizon, trade and weather remain the major factors, as well as continuing to digest the USDA’s large yield numbers from Friday. Most traders realize that the September report is the one that gives us a yield and sets the size of the crop. Without a doubt the crop will be decent across a large scale of growing areas, but the question is, will it be as good as the USDA has it pegged in the August report.
In the corn market, there’s still the question of how much this recent hot/dry weather has affected the yield. Also, how much better will demand be for corn with feed grain production issues around the world and given that U.S. corn remains the cheapest feed grain in the world. Argentina’s corn price is comparable to the U.S., but they have no corn to sell after October, so that is only temporary competition. Looking out long term for corn prices is the chance that there could be a huge corn acreage increase in 2019 due to the corn to bean ratio pointing largely toward corn being more profitable.
Soybeans found strength yesterday in large part due to the meal market. The U.S. continues to have the best meal supply in the world and prices fell to levels that represent good values for end users. This carried over into the overnight trade. Traders still want to see how much rain fall develops throughout the week so they can act accordingly. There is no doubt that a big chunk of the bean belt needs a good rain to finish off the crop. If that doesn’t happen, it could very well be that last week’s yield estimate will be the highest of the year.