July 24 – Corn Prices Fall as Weather Cools Down

Grain prices fell Monday thanks to an improvement in the weather outlook and a large round of fund selling. Over the weekend, rains hit Illinois, Iowa, Minnesota, and portions of the Dakotas.

The selloff came just hours before the USDA reported a downturn in crop conditions for the week ending July 23. Here’s a recap of today’s grain trading and the USDA’s crop report.

Corn Prices Dip

On Monday, the September corn futures contract fell 2.5 cents to finish the trading session at $3.77 per bushel. The December futures contract in Chicago dropped 2.75 cents to close just below $3.91.

The USDA released its weekly crop progress report this afternoon. Corn conditions continued to erode last week. 62% of the crop was rated good-to-excellent (G-E) on July 23. That’s a two-point downturn from last week’s rating of 64%.

Roughly 67% of the crop is silking. That is a big jump from the 40% last week, but below the 76% during the same period in 2016.

While the crop report will generate headlines over the next 24 hours, the USDA also announced for the 2017/18 marketing year the private export sale of roughly 135,000 metric tonnes to unknown destinations. Additional export data indicated that corn leaving the U.S. fell by 16.7% over the last week.

Finally, in China, the nation reported it had doubled its year-to-date imports in June. However, the nation’s roughly 383,000 MT of corn imports brings its YTD total to a figure that lags 2016 figures by nearly 75%.

Soybean Prices Fall, Conditions Erode

Another week, another downturn in soybean crop quality. The percentage of soybeans rated G-E on July 23 hit 57%, a four-point decline from last week. Crop conditions in North Dakota, Ohio, and Indiana all remain at or below 47%. But conditions are the worst in South Dakota. Just 25% of the crop was rated G-E, while 36% was rated very poor or poor.

The percentage of soybeans blooming on July 23 hit 69%, a 17-point gain from last week. That figure is five points lower than the same period in 2016.

The August soybean futures contract slumped 11.5 cents to $9.97 per bushel. The November soybean futures contract dropped 12.25 cents to finish at $10.10. With a round of rain in the forecast and cooler temperatures in sight, selling was rampant.

Down in South America, it’s looking like we’re going to see lower yields in the soybean markets and higher plantings. Safras Mercado estimates that plantings for the marketing year will see a 5.2% increase from 2016/2017 at 87.7 million acres. Overall production is pegged at 113.2 million metric tonnes.

Wheat Prices Slide on Rain Forecasts

All three wheat markets saw prices decline thanks to forecasts of rain. With rains expected in the northern Plains, farmers are hoping that crop conditions improve.

Wheat prices hit their lowest levels since June 29.

In Chicago, the September wheat futures contract slumped 10.5 cents to close the day at a little more than $4.88. In Kansas City, the September HRW futures contract fell 8.5 cents to finish the session at $4.87. Meanwhile, the September spring wheat futures contract fell 15.25 cents to finish just above $7.50.

The Winter Wheat harvest is getting closer to completion. On July 23, 84% of the harvest had been collected. One hundred percent of the winter wheat crop has been harvested in Arkansas, Illinois, Kansas, Missouri, North Carolina, Oklahoma, and Texas. We’ll check in later this week on winter wheat conditions in Washington and the rest of the Pacific Northwest as these states continue to ramp up their efforts.

Spring wheat conditions remain problematic. Last week, the state of the U.S. spring wheat crop came in at 34% G-E. That was a one-point decline from the previous week’s figure.

On the global front, markets have been paying close attention to the impact of recent rains on the German wheat crop. Last week, Brennan advised everyone to take more of a wait-and-see approach before reacting to early reports.

To the west, French crop conditions appear to be better than expected. FranceAgriMer reported that the European Union’s largest wheat producer had harvested roughly 63% of the wheat crop through July 17.

Elsewhere, the Russian Ag Ministry has forecasted a total grain harvest of 26.7 million metric tonnes. Through last Friday, 21.9 million metric tonnes had been collected. By comparisons, the nation saw a total harvest of 32.7 million metric tonnes last year.

What’s on Tap Tuesday?

Tomorrow, we’ll be talking about the biggest challenges that farmers face in the agricultural sector… and a simple solution that can save you time and money.

About the Author
Garrett Baldwin

Garrett Baldwin is a content strategist and editor at FarmLead. He covers the global grain markets and public policy issues related to the agricultural industry. He is a graduate of the Medill School of Journalism at Northwestern University. He also holds a Master’s Degree in Economic Policy from The Johns Hopkins University, an MS in Agricultural Economics from Purdue University, and an MBA in Finance from Indiana University.

Most Recent Posts
Aug 16 – Wheat Exports and the Trade War’s Impact
August 16, 2019 Brennan Turner
As we investigate vegetable oils and wheat exports this morning, grain prices are mostly higher as the traders buy up some bargain prices.
October 4: Corn Prices Edge Higher With October WASDE in Focus
October 04, 2018 Garrett Baldwin
Corn prices ticked higher Thursday as traders and analysts began to speculate on next week’s release of the October WASDE report.
Accounting for Weather Ahead of Corn & Soybean Plant 2019
March 18, 2019 Brennan Turner
While the trade war is still grabbing a lot of headlines, it's the recent volatile weather that is starting to help grain prices improve.