With weather patterns turning wetter and the traders preparing for a short week, volatility had not been kind to crop markets ahead of the Fourth of July holiday.
Crop markets historically step down through harvest season, and the recent price action seems to suggest the same will happen in 2023. In the final week of June, the new-crop corn and soybean contracts lost more than 70 cents due to the more favorable conditions.
Jack Scoville, market analyst with Price Group, said the late June price action may be offset by the upcoming USDA reports to start July, but it may not take long before the downward trends resume.
The USDA’s Quarterly Grain Stocks and Planted Acreage reports were released after this article went to print.
“Ideas are that the top end of the yield potential is lost but that no serious damage has been done yet, but serious damage could be done to crops where the rains miss in the next few weeks,” Scoville said. “Corn is rolling leaves in central and southern Midwest areas but could be in better condition to the north where there have been a few showers.”
According to the USDA Crop Progress and Condition report released June 26, Missouri’s corn crop was rated only 31% good or excellent, 44% fair and 25% poor or very poor. The soybean crop was only 32% good or excellent.
In Iowa, the corn crop was 56% good or excellent, 32% fair and 12% poor or very poor. The soybean crop was 48% good or excellent.
In Illinois, the corn was 26% good or excellent, 47% fair and 27% poor or very poor. The state’s soybeans were 25% good or excellent, 52% fair and 23% poor or very poor.
Demand has also been poor as the Brazilian harvest begins to come in and the lower prices drag on U.S. crops.
“Brazil basis levels are still low and the US is being shut out of the market for most importers,” Scoville said. “Brazil is still selling a lot of soybeans to China and other countries.”