US corn is rated 65% good/excellent (down 3 pts), soybeans 60% good/exc (-2 pts), spring wheat 27% good/exc (-10 pts). Winter wheat is 49% good/exc (+1 pt) and 17% harvested. North Dakota spring wheat is rated 19% good/exc, a new record low. It is apparent that US spring wheat is in the ‘disaster’ category with little to no meaningful rain in the forecast.
It is likely that crop condition scores were tallied before this week’s rain, so we might see a slight uptick next week. These rains have been a ‘just in time’ event and should keep prospects high for an above average corn and bean crop.
Weather will remain in the spotlight, and is possibly helping to keep an element of risk premium built into the market. Canada will come into focus before too long. The rain they had a fortnight ago seems like a distant memory with a forecast for sustained heat coming into this week. 42% of Saskatchewan is rated ‘short to very short’ for topsoil moisture, up from 26% a week ago. Crop development is rated as ‘normal’ for this time of year, so dry conditions have not impacted yield prospects at this point.
Wheat harvest has started in the Northern Hemisphere. US HRW harvest is rolling along slowly after a wet start. Similarly, US SRW harvest is held up by moisture flowing inland from a tropical storm in the Gulf. It will raise the issue of quality into the fore, but again it is very early days.
Ukraine is looking at an increased production year-on-year with a 40mmt corn crop and 29mmt wheat crop being estimated. Russian wheat is building nicely with SovEcon upping their estimate to 85.4mmt (last year was 85.9mmt) on the back of excellent crops in the south and centre. Spring wheat in Russia is possibly the one area of concern as these areas remain dry and hot. Spring wheat is traditionally not exported, rather used for domestic consumption, but it may drag winter wheat away from traditional export pathways if production problems emerge.
Expect the market to remain choppy, with new crop harvests competing with weather to steal the headlines.