Grain Markets Higher in Response to June 30th Reports

Wet weather across the Midwest continues to curb crop progress—both planting and growth. The two USDA reports released this week, Crop Progress on Monday, June 29th, and the Planted Acres report on Tuesday, both reflected the effects of the overabundance of precipitation. It continues to create problems for farmers, and crop conditions have substantially deteriorated in the final two weeks of June, according to the USDA.
The grain markets have responded accordingly. July corn prices increased 18.3 percent in June and closed at $4.14 per bushel, and the July soybean contract price increased 13.4 percent throughout June to close at $10.56 per bushel. Looking at the Crop Progress report numbers, the USDA estimated that as of June 28th, corn conditions stood at 68 percent as excellent/good, a 3 percent decrease from the previous week and a 12 percent decrease from last year. 24 percent of the crop was reported as fair, a 1 percent increase from the week prior, but a 4 percent increase from last year. 8 percent was rated as poor/very poor, a 2 percent increase from the week prior.
Soybean conditions showed similar estimates, with 63 percent rated excellent/good, a 2 percent decrease from the previous week, and a 9 percent decrease from last year. 28 percent of the crop was rated as fair, a 1 percent increase from one week prior, while 9 percent of the crop was rated as poor/very poor.
Looking specifically at Nebraska numbers, corn condition rated 1 percent very poor, 5 poor, 24 fair, 58 good, and 12 excellent. Corn silking was at 1 percent, equal to last year, and near the five-year average of 4.
Nebraska soybean conditions rated 1 percent very poor, 7 poor, 24 fair, 57 good, and 11 excellent. Soybean emergence was at 92 percent, behind 100 last year and 99 average. Blooming was at 10 percent, behind last year’s 20 percent, but near the 9 percent average.
The overabundance of precipitation was also reflected in the USDA Stocks and Acreage report released June 30th, as stocks and acres planted came in below analyst expectations. Specifically, the USDA put U.S. corn acreage at 88.9 million, versus the trade expectation of 89.3 million and its March estimate of 89.2 million. Similarly, soybean plantings have been estimated at 85.1 million acres, this versus the analysts’ estimate of 85.2 million acres and 84.6 million acres in March.
For stocks, the USDA report showed 4.47 million bushels versus the analysts’ estimate of 4.555 billion bushels and the stocks estimate of 3.852 billion bushels of last year at this time.

Soybean stocks, too, were reported as lower than previously expected, with June stocks totaling 625 million bushels, versus the expectation of 670 million bushels and last year’s 405 million bushels.

Overall, despite the headaches that the excess precipitation is causing for some, the positive grain market response is welcome news to farmers. Will the bullish market continue? Much will depend on the weather.

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Sources consulted: McGinnis, Mike. “Trade Responds to USDA Bullish Data.” Agriculture.com. Meredith-Agrimedia. 30 Jun. 2015. Web. 01 Jul. 2015. Schober, Marc. “Grains Rally in Wet June Weather.” Agweb.com. Farm Journal. 01 Jul. 2015. Web. 01 Jul. 2015.