Grain Tidbits - June 15, 2018

8:17 AM 6/15/2018

This morning (Friday) July corn has plunged to a contract low.  July beans are trading at the lowest level in nearly 18 months. Minneapolis wheat is at a one year low.  Trade concerns are the number 1 factor, with China saying it will not increase its proposed purchases of US products that had included soybeans, corn and wheat after President Trump imposed tariffs effective today. Mexico is also talking retaliation on imposed tariffs including $4 billion of annual corn and soybean imports.

U.S. corn conditions decline only slightly last week and are tied for third highest for this week since 1989, behind only 1991 and 2007. Corn conditions remain well ahead of the 1989-2017 average and last year at this time.

U.S. soybean conditions also declined slightly from last week, but are at their highest level for this week since at least 1989. 

While corn and soybean conditions are very high, there is little correlation with crop conditions in mid-June and final crop yields.

Winter Wheat harvest has begun in Kansas this week, with higher proteins and good test weights being reported in the western 2/3 of the state. Yields have varied widely, ranging from single digits per acre to 40 bushels per acre.  As mentioned, protein levels are running very high in comparison to normal averages.  There was an estimate out averaging 13-14 percent, where in previous years 13 percent was considered high. This has resulted in our hard red spring wheat to lose ground versus hard red winter wheat due to protein supplies becoming more available further south.  It seems yields have been disappointing so far with drought, shallow root systems, and freeze damage being factors.

Rainfall over the past week in Australia has favored Western Australia, South Australia, Victoria, and southern New South Wales, leading to improvements in soil moisture for wheat, but dryness remains a concern in southern Queensland and northern and central New South Wales. No significant improvement is expected in these areas over the next 10 days as showers favor only Western Australia, South Australia, and Victoria.

US weather looking non-threatening for the 2018 crops and leaving market with bearish taste in their mouth for the US balance sheets as old crop supplies remain more than ample. Corn and bean prices have tumbled on the mass exodus.