July 24 – Grain Prices Entering Mid-Summer Rangebound Chop

Grain prices are in the green this morning, as the choppy rebound from Monday’s lows has been mostly been brought about by North American production uncertainty.

“Harmony with land is like harmony with a friend; you cannot cherish his right hand and chop off his left.” – Aldo Leopold (American ecologist)

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July 24 – Grain Prices Entering Mid-Summer Rangebound Chop

Grain prices are in the green this morning, as the choppy rebound from Monday’s lows has been mostly been brought about by North American production uncertainty.

Yesterday, grain prices made some bullish progress on a crop progress report from the USDA that showed the U.S. crop continues to be behind its normal development timeline. While production concerns are bullish, there’s still a lot of grain left both in the United States and the rest of the world. With a lot of uncertainty around American seeded acres, as well as those acres being seed least, subsequent yields and production estimates are just as ambiguous. Accordingly, grain prices will continue to be rangebound, at least until the August WASDE report in 2.5 weeks.

Until then, grain prices will be mainly influenced by weather and any updates on trade issues with China, but not necessarily in that order! Some cooler temperatures (relative to the 100 degrees and higher seen the past week) are in the forecast for most of the Midwest. [1] DTN says that some rain will also fall over the next week though. [2]

United States 7-day precipitation forecast through July 31, 2019

Comparably, northern areas of the Canadian Prairies are going to get some moisture over the next week as per DTN’s forecast. [3] While the rain will likely continue to put pressure on grain prices in Western Canada, the limited moisture for southern areas of the Prairies will likely help Harvest 2019 get clicking along.

Western Canada 7-day precipitation forecast through July 31, 2019

Elsewhere for weather, Europe is in the middle of a similar heatwave that most of the U.S. and Eastern Canada saw last week. [4] The heat will have an impact on the spring-planted crops, but the harvest is already rolling for the fall-seeded acres.

An Update on Oilseed Trade Happenings

While in Monday’s FarmLead Breakfast Brief I talked about canola prices being challenged to reverse their downtrend, there are a few other nuggets of information to be aware of in the oilseeds market. To start off, it’s expected that India will import a lot more edible oils as limited monsoon rains will result in less-than-expected production volumes of soybeans, cotton, and the like. [5] It’s expected that total edible/vegetable oil imports in 2019/20 will rise to a new record of more than 16.1 MMT. For context, India usually imports canola oil from Canada, soy oil from Argentina & Brazil, palm oil from Indonesia and Malaysia, and sunflower oil from Ukraine.

Speaking of Ukraine, APK-Inform is forecasting that the rapeseed harvest there could reach 3.58 MMT there this year. [6] This would be a jump in production of 26% year-over-year and a new record for the Eastern European country, but mainly because acres planted last fall jumped by 24% to 3.21M acres (about 90% of all rapeseed seeded in Ukraine is a winter crop). As of yesterday, the Ukraine government says that 2.73 MMT of rapeseed has already been harvested off nearly 2.8M acres, with an average yield of 43.4 bushels per acre. While this is below the average yield of nearly 46 bpa from a year ago, it’s widely expected that the additional production will be exported: the USDA is currently expecting Ukraine’s exports to climb almost 30% year-over-year to 3.06 MMT. [7]

Finally, in Brazil, the protein content of the soybean harvest fell this year, reversing a four-year trend of higher quality coming off. [8] While the trade war with the U.S. has been the obvious reason for Chinese soybean importers to “Buy Brazilian”, another factor has been the higher protein content. This year though, the average protein fell to 36.83% from 37.14% last year. While that might not be a big change to you or me, buyers have some strict contracts in place as they want to ensure their product’s quality. Comparably, Argentina’s soybean harvest this year saw average protein levels of 35.4% (up from 34.6% last year), while the America soybean harvest in 2018 had average protein of 34.2%.

Grain Prices Lifted by Subdued Crop Progress

Yesterday, grain prices pulled up their socks from the lows made Monday thanks to the USDA’s crop progress report that showed crops are still behind in their development in a lot of major growing areas around the United States. [9] In that crop progress report, here’s a look at some of the most relevant percentages, what it was a week ago, a year ago, and the five-year average:

  • Corn Rating: 57% good-to-excellent (G/E); 58% G/E last week; 72% G/E a year ago; and a five-year average of 70% G/E;
  • Corn Silking: 35%; 17%; 78%; a five-year average of 66%;
  • Soybeans Rating: 54% G/E; unchanged week-over-week; and 70% G/E a year ago;
  • Soybeans blooming: 40%; 22% a week ago; 76% a year ago; and an average of 66% for this week;
  • Soybeans Setting Pods: 7%; no numbers last week; 41% a year ago; and 28% average;
  • Barley Rating: 76% G/E, unchanged from last week; and 81% G/E seen a year ago;
  • Oats Rating: 64% G/E, 68% G/E a week ago, and 72% G/E a year ago;
  • Oats Harvested: 12% this week; no number from last week; 23% a year ago; and an average of 22%.
  • Winter Wheat Harvested: 69%; 57%; and 79% seen harvested a year ago and for the five-year average; and
  • Spring Wheat Rating: 76% G/E, unchanged from last week; and 79% G/E a year ago.


Digging into some of the details, the Wheat Quality Council’s spring wheat crop tour through North Dakota and Minnesota this year is showing some above-average yields. [10] Here’s a breakdown of the yield estimates of the spring wheat crop along the different routes:

  • Southern leg: 38.6 bushels per acre average (34.7 bpa a year ago and a five-year average of 33.8 bpa);
  • Eastern Leg #1: 50 bushels per acre (40.3 bpa a year ago and a 48 bpa average); and
  • Eastern Leg #2: 71 bushels per acre (30.6 bpa a year ago and 42.7 bpa average).


We’ll get the final tally on Thursday from the 2019 tour, yesterday’s numbers suggest an average yield of 43.1 bushels per acre, up more than 4 bushels from last year’s 38.9 bpa. It’s worth mentioning that Asian flour millers have been buying up cheaper U.S. and Canadian spring wheat on the recent price decline. [11] For example, Western Canadian cash hard red spring wheat prices are down more than 6% in the past month and 10% from the same point a year ago.

Average cash HRS wheat grain prices in Western Canada for spot movement as of July 19, 2019

To growth,

Brennan Turner
TF: 1-855-332-7653
@FarmLead on Twitter

At 7:30 AM CST in the North American futures markets (*not cash prices*):
(all prices in dollars per bushel unless otherwise indicated)
$1 USD = $1.313 
CAD, $1 CAD = $0.7616 USD)

Sept Corn: +4¢ (+0.95%) to $4.295 USD or $5.639 CAD
Sept Soybeans: +6.8¢ (+0.75%) to $8.983 USD or $11.794 CAD
Sept Soybean Meal (per short ton): +1.90¢ (+0.6%) to $309.70 USD or $406.64 CAD
Sept Soybean Oil (cents per lbs): +0.23¢ (+0.8%) to 28.36¢ USD or 37.24¢ CAD  
Sept Oats: +4¢ (+1.5%) to $2.70 USD or $3.545 CAD
Sept Wheat (Chicago): +8.3¢ (+1.7%) to $4.955 USD or $6.506 CAD
Sept Wheat (Kansas City): +7.5¢ (+1.75%) to $4.39 USD or $5.764 CAD 

Sept Wheat (Minneapolis): +3.5¢ (+0.65%) to $5.24 USD or $6.88 CAD
Nov Canola: +5.7¢ (+0.55%) to $10.206/bu / $450/MT CAD or $7.773/bu / $342.72/MT USD

COMMODITY TRADING INVOLVES RISK AND MAY NOT BE SUITABLE FOR ALL RECIPIENTS OF THIS POST. Neither the information presented, nor any opinions expressed, constitutes a solicitation for the purchase or sale of any commodities. The thoughts expressed in this email and basic data from which they are derived are believed to be reliable, but cannot be guaranteed due to uncertainty about future events and complexities surrounding commodity markets. Those acting on the information are responsible for their own actions.

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