Morning Comments, July 22, 2020

Caseih Planting 70

Opening Calls

Corn: 1 to 2 higher 

Beans 1 to 2 lower

Corn is up a little this morning after closing 5 1/2 lower yesterday. There are several factors impacting the corn market including:

  • Weather - while there are some dry areas, overall weather appears to be supportive of corn yields.
  • Crop ratings - the improvement in crop ratings this week will be watched closely to see if we continue to improve next week.
  • Corn yield improving - many in the trade are looking for corn yield to increase going forward with some talking 180+.
  • Ethanol margins - back in the red and it looks like, with an inventory build, the industry may not hit the USDA grind number - again increasing the already large ending stocks.
  • South America - a large corn crop that is currently cheaper than the U.S. and will be supplying the market into 2021. 
  • Fear over further lockdowns/restrictions due to coronavirus.

The plus side for corn is that China may continue to be buyers as it appears there are questions on the quantity and quality of their reserves. However, this has not been enough to keep the market from falling.

Beans are a little lower this morning with the recent run coming under pressure from the following

  • Better than expected crop conditions
  • Rains in the Midwest (there are still some areas missing rains).
  • Favorable weather forecasts into August
  • The potential for the USDA to raise the yield based on crop rating and weather.
  • Thoughts that China's buying may slow until after the election, especially with the announcement of the closing of China's consulate in Houston.

Bulls are making the argument that China's demand for U.S. beans will continue, but as of right not the weather is the headline for beans. 

If you are behind on new crop sales or still have old crop in the bin, contact your local GMA to discuss marketing strategies