Tuesday, June 13, 2017

Ag Futures: "Spring wheat futures soar anew, as US crop rating tumbles"

Last Chg
Corn 380-6+3-4
Soybeans 934-4+3-2
Wheat 439-4+5-4

From Agrimoney:

Ideas of the demise of the spring wheat rally were somewhat premature.
Minneapolis spring wheat futures got off to a screaming start to Tuesday, soaring 2.9% to $6.18 a bushel for July delivery as of 09:40 UK time (03:40 Chicago time).
Earlier, the contract touched $6.21 ¾ a bushel, the highest price for a spot lot since January 2015.
The gains followed the release overnight of US Department of Agriculture ratings which showed the US crop deteriorating far more significantly than had been thought, trumping by a distance beneficial effects of rains at the weekend.
'Lowest crop rating since 1992'
While investors had been expecting a 2-point drop in the US spring wheat rating, to 53% in terms of the proportion rated "good" or "excellent" the outcome was far more severe – a 10-point slump to a 45% reading.
That matched the biggest week-on-week decline to a spring wheat rating in the past 20 years (the other 10-point drop being in July 2006 - a year when the US spring wheat yield came in at 33.2 bushels per acre, the lowest but one since the weak 1997 result.)
It was also the lowest reading for any week since July 2006 (a year when the rating ended up at 32%), and the lowest mid-June reading on easily-available data going back to 1995.
According to Joe Lardy at CHS Hedging, "we are now at the lowest crop rating since 1992 [presumably for the time of year] when it was 43%".
Ratings slide
Of less surprise was where the readings were notably weak in the Dakotas, where drought has been spreading fast.
The proportion of spring wheat in North Dakota, the top growing state, rated as in good or excellent condition dropped by 9 points to 43%, and in South Dakota by 12 points to 13%.
(That compares with 57% in poor or very poor condition in South Dakota.)
However, in Montana, the rating dropped particularly steeply, by 25 points to 23%.
Weather outlook
That said, the northern Plains received rains on Monday, and more are expected this week, although how much is course a matter of conjecture....MORE
Last week: