7.29.22 Market Update

 

This week’s action:

Corn Sep up 57 @ $6.19

Corn Dec up 59 @ $6.22

Beans Nov up 1.61 @ $14.74

KC Wheat Sep up 64 @ $8.80

Feeders Aug down 3.00 @ $178.575

Fats Aug down .70 @ $136.450

Aug Hogs up 2.08 @ $120.65

Aug Crude up 3.54 @ $98.40

 

Seasonal Averages:

Dec corn Feb 1 – June 30: $6.80

Dec corn since Russian invasion: $6.78

Nov beans April 1 – today: $14.68

Sep KC wheat since Russian invasion: $10.83

 

Recap:

What a difference a week can make!

Row crops scuffled to the finish line Friday afternoon but had an impressive week nonetheless. New crop corn and soybean futures are back to levels from the beginning of the month. Soybeans are made in August but using a simple 5-year average we will likely have record low ending stocks this time next year. Europe is experiencing an extremely hot/dry growing season so many expect the EU to be a larger importer of feed grains than normal. Crop conditions likely worsened this week, but as of July 24 corn was rated 61% good/excellent (down 3% from previous week) and 3% lower than the 10-year average. Soybeans were rated 59% good/excellent (down 2% from previous week) and 2% lower than the 10-year average. The Missouri River has proven to be a significant line in the sand so far this summer. Nebraska’s corn crop is rated 57% good/excellent while Iowa is leading the pack with an 80% good/excellent rating.

The Wheat Quality Council wrapped up their scouting tour this week and predicted North Dakota will produce 49.1 bu/acre spring wheat yields. This would be a record.

 

Forecast:

Typical summer heat returns next week after some cooler weather for many growers this week. Most of the corn belt will enter August with a dry forecast.

 

Outside Markets:

As anticipated, the FED raised interest rates .75% this week for the second consecutive month in their fight against inflation. The benchmark is now in a range of 2.25%-2.50%. Many analysts predict another hike in late September. The national gas average is $4.25 (Nebraska $4.10). This is 75 cents cheaper than the mid-June highs. The national diesel average is about 50 cents softer than last month at $5.32. Oil has been trading in a broad $10 range most of July, struggling to maintain any strength above $100/barrel.

GDP slid 0.9% in Q2, marking the second straight quarter with shrinking GDP. Historically this would be termed a recession. The National Bureau of Economic Research “officially” determines if we are in a recession. They are unlikely to make any official judgements for another couple months. The White House is claiming this is only a “Technical Recession,” pointing to a strong labor market to sidestep any negative designations as we move closer to election season.

Walmart released disappointing Q2 earnings this week. Among other things, executives pointed to burdensome levels of apparel stacking up on store shelves. Target also recently blamed large inventories of shirts and pants as an issue as inflation is beginning to change consumer behavior. New crop cotton futures are 25% off from May highs.  

 

Something that Probably Means Nothing:

The most recent corn crop rating is 61% good/excellent. The crop rating July 29, 2012 was only 24% good/excellent.

The historic rally everyone wants to talk about from the summer of 2012 peaked on August 10. Monday is August 1.

 

 

Enjoy your weekend!