Corn condition unchanged, soybeans down 1%. Corn condition G/EX unchanged vs. last week at 61% (as expected), soybeans -1% to 62% (63% forecast). Prices have pulled back in recent weeks with Corn back to <$4.40/bu, Soybeans to $11.60/bu, remaining well below breakeven levels (>$5 Corn, $13 Soybeans) needed for incremental equipment investment. We are closely watching condition reports through August as corn G/EX ending in the low 60s could prove a clearer supply catalyst for prices to move higher post-harvest particularly should a resolution to the Iran conflict prove elusive.
Crop conditions G/EX unchanged for corn, -1% for soybeans; crop condition remains in the Low-60s indicating a slightly below average crop. 61% of corn rated G/E (unchanged week/week, -11% year/year) in line with consensus forecasts, soybeans 62% G/E (-1% week/week, -6% year/year) vs. consensus 63%.
Corn silking, dough and soybean pods setting ahead of last year, five-year average. Corn is silking 1% ahead of the five-year average (94% vs. 93%) and 1% ahead of last year and 61% of corn has reached the dough stage, 6% ahead of the five-year average and 5% ahead of last year. Soybean pod setting came in at 74%, 5% ahead the five-year average and 5% ahead of last year.
Heavy precipitation expected over the next week in key growing states. The majority of top-producing states are expected to see above-average rainfall over the next week with two to five inches of rain expected across much of the Corn Belt and stretching from the Plains states and into the Ohio Valley. The heaviest rainfall is expected in Illinois, Indiana, Ohio and Kentucky with healthy levels of rain in Nebraska, South Dakota, Missouri, and eastern Colorado.
Corn and soy prices have pulled back off highs in recent weeks despite lagging crop condition as heavy rainfall is expected across key corn/soy states. Today’s report showing crop condition unchanged for corn and down 1% for soy with both remaining in the low-60s G/EX is a bit of a non-event. Bears are focused on heavy rains in the forecast this week across key corn/soy states with bulls remaining focused on Iran (higher biofuel outlooks) and the potential for USDA yield forecasts to be revised down if below-average crop condition is sustained (Wednesday’s WASDE could see slight downward revisions, remember the USDA has been using a trend line corn yield of 183 bu/acre, we suspect revision will be low ~1 bu but anything below 181 would vindicate the bulls). It's not over yet; the last three weeks of August will prove key.
