Monthly Grain Market Outlook | Weekly Crop Update

Nate Bruce, Farm Business Management Specialist, nsbruce@udel.edu

The trend in corn prices during the month of June has been down across all futures. Corn prices have dropped in the $0.40 – $0.50 range across futures since hitting price highs in May. Significant weather problems will need to occur for market prices to rally. There has been some excessive rain in the Midwest this year and locally in the Mid-Atlantic a major drought. But as of lately, market prices have continued their downward retreat. There is still quite a bit of corn in carryover looming over the market. This could dampen any bullish news for the foreseeable future. Soybean prices have followed the same downward trend as corn prices over the month of June. Prices have dropped in the $0.80 – $1.00 across all futures during the month of June. Unfortunately, high prices for soybeans increased the demand for Brazilian soybeans in the export market, impacting the demand for American soybeans. Both USDA and CONAB, Brazil’s version of USDA, slightly reduced their estimates for Brazil’s soybean crop. At this point, much like corn, soybean prices will be tied to weather conditions. With the wheat harvest well underway across Delmarva, prices have dropped significantly across futures over the month of June. Russian wheat concerns are no longer influencing the market. Wheat prices have dropped in the $1.20 – $1.40 range across all futures. It is unbelievable to think that July wheat was just above $7.00 a couple weeks ago.

The June USDA (World Agriculture Supply and Demand Estimates) WASDE report was published on June 12^th. Corn estimates in the June report were exactly the same as corn estimates in the May report. Production, beginning stocks, imports, feed and residual demand, exports, and ending stocks all remained unchanged. Ending stocks remained unchanged at 2102 million bushels. Estimated yield harvested per acre remained unchanged at 181 bushels per acre. The farm season-average price remained unchanged at $4.40 per bushel. The June USDA WASDE estimated increased soybean beginning stocks, import supplies, and ending stocks. Ending stocks were estimated to increase from 445 million bushels to 455 million bushels. Soybean production, imports, crushings, exports, seed, and residual demand all remained unchanged from the May estimate. The harvested yield per acre remained unchanged from the May estimate at 52 bushels per acre. The farm season-average price remained unchanged at $11.20 per bushel. The June USDA WASDE estimated increased wheat production, import supplies, and exports. Estimated harvested yield per acre increased from 48.9 bushels per acre to 49.4 bushels per acre. The farm season-average price increased from $6.00 per bushel to $6.50 per bushel. Beginning stocks, imports, food, feed and residual use, and seed demand all remained unchanged. Ending stocks decreased from the May estimate from 766 million bushels to 758 million bushels. The next USDA WASDE report will be released on July 12^th.

Both CONAB and USDA lowered their soybean crop estimates in June. CONAB reduced their estimate from 147.6 million metric tons to 147.3 million metric tons. USDA dropped their estimate for the Brazilian soybean crop from 154 million metric tons to 153 million metric tons. The discrepancy between the two agencies on how large the soybean crop still continues. Wheat harvest has started in the Black Sea area. Early yields in the worlds number one wheat exporting country, Russia, have been slightly higher than expected, driving down export prices. It should be noted however that these early reported yields are from a historically high yielding region of the country. The Russian wheat growing season had its fair share of issues this season and harvest yields remain patchy at best. The Foreign Agricultural Service (FAS) estimated the Russian wheat crop will be 9% smaller than last year at 83 million tons. In addition, FAS predicts Russian wheat exports will drop by 11% to 48 million tons. Ukrainian grain exports have reached prewar levels but still face significant challenges to getting to the international marketplace. The world’s number on grain importer, China, has slowed down importing grain. This will have a drastic impact on international grain prices if the trend continues.