The Grain Report

6/30/2009

Corn:

The first report of the week came with the Weekly Export Inspection Report showing 27.6 million bushels of corn was inspected for near term export down from 42.6 the week prior, 43 a year ago and a four week average of 31.7.  Ignore it, as it came ahead of today’s big Planted Acreage Report having importers waiting for the report numbers and direction of the market before they re-enter.  After the close on Monday at 3:00p central time the Crop Progress Report came out showing 72% of the corn crop was in good to excellent condition up from 70% the week prior and 61% a year ago.  The best were:  Iowa 81%, Minnesota 82%, Nebraska 82%, Ohio 81% and Wisconsin 81%.  The worst was Illinois at 58% but up 7% from the week prior.  Indiana 62% unchanged and Missouri 54% up 5%.  This week’s weather looks much cooler with marginal rain but nothing that should hurt ratings.  The crop is off to a good start on two fronts.  One the ratings are higher than a year ago right from the first report on condition four weeks ago and had their best rating of the season on this report.  Two the eastern belt areas furthest behind on planting and the worst of the late spring weather are all improving.  We will watch the weather at WXRISK.COM the agricultural weather site daily for a change of any kind.  The better the ratings the lower the price- the lower the rating the higher the price.  However, the big news is the USDA Planted Acreage Report.  They put corn acres at 87.035 m.a. up 2.049 m.a. from the March 31st Planting Intension Report, up 1.053 from last year and a whopping 2.877 m.a. over the pre-report trade guesses.  Needless to say, this came as a surprise to the trade as the average guess would have been 828 thousand acres under the March 31st report.  With good yields it would keep next year’s ending stocks from dropping under 1 b.b. which had been talked about.  This gives the market a little room for error in the growing season now.  When we come in Wednesday, the weather and its impact on emerging corn becomes 80% of our pricing influence.  The very weak trade today could set up for a lower open on Wednesday but that low if occurs may hold through on Friday as traders note that acres are only 1 m.a. over last year and good weather is not a promise.

Bean:

Monday’s Weekly Export Inspections came in at  12.9 m.b. inspected for near term export down from the week prior of 15.3 a year ago of 20.2 and just over our four week average of 10.5.  Pay it no attention as importers were sitting on their hands awaiting Tuesday’s Acreage Report for near term market price direction.  After the close on Monday, the Crop Progress Report showed 96% of the crop is now planted leaving the trade to wonder if remaining acres will go unplanted.  The condition report was 68% G-E up 1% from the week prior but the key pod setting stage is a long way off.  Weather near term looks good for crop development but it is the period between July 15th and August 20th that will determine the crop.  Tuesday’s Acreage Report was pretty much in line with the trade.  It showed 77.483 m.a. were planted up 1.459 from the March 31st Report, up 1.765 from last year and 822 thousand acres under the pre-report guess but that may show up on next month’s data as our Weekly Crop Progress had 4& left to plant.  None of these numbers whether beans or corn are locked in stone but futures adjustments will be marginal.  Now it is up to weather and its way on yields.  We are off to a great start on crop condition up 10% form last year.  Traders will continue to watch July for a further squeeze there as stocks are looking to run under 100 m.s. on the July 10th USDA Crop Report and there was no deliveries today.  If July gets squeezed it puts a floor under the other months.  Beyond that all eyes turn to weather and outside markets.

Wheat:

Monday’s Weekly Inspections for wheat exports came in at 10.1 m.b. vs. 13.5 last week, 17.9 a year ago and four week average of 13.5.  The low number is largely reflective of a weak demand pattern and a little reflective of patience prior the Tuesday Acreage Report.  Monday’s 3:00p Crop Condition Report for spring wheat showed 76% of the crop is in G-E condition down 1% from the week prior and 2% over a year ago.  The trade had expected a 2 to 3% improvement but it is still a very good number and if we finish the growing season here or a higher rating this spring wheat crop will be in high demand.  The report put all wheat planted at 59.775 m.a. vs. the pre-report average guess of 58.337 and the March 31st Report of 58.638.  Spring wheat came in at 13.772 m.a. up 468 thousand acres from March 31st, up 670 from the average guess but 363 under a year ago.  Durum was 2.555 up 110 from March.  Nothing Bullish here on report day.  However, like corn and beans this is a Planted Acres Report and come Wednesday the Market says it is not what you plant but what you grow, how’s the weather?  They will not trading this report after today.

Tim Hannagan

Alaron Research Team
800.563.9510
thannagan@alaron.com

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