The USDA weekly US crop progress report was out overnight. One interesting number is the percentage of the corn crop rated good to excellent. At 76% it’s the second best June 1st rating in the last ten years. The corn crop is also 95% sown, 7% ahead of the 5 year average. Corn condition in the drier north is holding the rating back, the Dakotas and Michigan are not great.
The amount of winter wheat rated good to excellent in the US jumped 1% to 48%, this isn’t a great rating and is 3% worse than last year. The real problem is in the spring wheat belt though. With the spring wheat now 97% sown they are looking for some good rain to break the dry spell and it’s not showing up on the forecast. Thus we see a 2% week on week decline in the G/E rating for spring wheat, back to 43% G/E. N.Dakota showing just 4% of the crop in excellent condition and a massive 63% rated Poor / Fair.
As one would expect this has given support to spring wheat futures. The Minneapolis contract leading wheat higher last night, putting on 44c/bu (AUD$20.83/t) in the July contract.
The strength in Chicago corn also helped pull wheat higher. Good weekly US exports and a reduction to the Brazilian crop all fuelled technical buying with orders being triggered on the way up. The speculative net long in CME corn is still large, around 33.5mt. This will be rolled or liquidated at some stage and may produce volatility in the process. While the market gets supportive news, like the 16mt reduction in the Brazil second corn crop, those long corn will likely continue to feel pretty smug though.
The strength in corn does tend to support global feed grain values, thus local sorghum may see some benefits today.