Grain Tidbits - July 27, 2018

12:49 PM 7/27/2018

With the US spring wheat crop rated 79% (good - excellent), the trade was looking for the spring wheat tour to find record high yields.  USDA is already forecasting spring wheat yield at a record-tying 49.0 bu per acre. But heat stress and the quick maturity of the crop may have caused production to decline. At the conclusion of the wheat tour, spring wheat was rated at 41.1 bu per acre, which is 4.3 bu per acre lower than the 5 year average. French milling wheat climbed to 3 year highs as Northern Europe continues to record extremely high temperatures.  

Feed demand is forecast to spike in Europe as the wheat crop deteriorates and pasture lands across the continent have turned brown. Feed buyers are bidding 2 to 5 euro per metric ton more than exporters for 12.5 protein wheat.  There is also talk of the crop in Canada deteriorating which has led to strength in Minneapolis spring wheat.

Soybeans have traded higher this week on strong domestic and export demand, which is fairly unusual for the time of year. It seems as if the trade is realizing that world supplies are limited this year. Accumulated soybean exports are 91% of the USDA yearly estimate, with the average at 95% as shipments have been well above normal in past months.  Export commitments for soybeans are now 4.1% lower than the same time last year. 

Total corn export commitments are now 4.89% larger than last year. With just over a month and a half, they are 97% of the USDA full year export projection vs. the average of 103%.  We will see big weekly sales and shipments in August if USDA is correct.  The International Grains Council trimmed their world corn carryout by 4 million metric tons mainly of increased consumption.