USDA soybean yield estimates dropped a bushel from 42.6 to 41.7 per acre. Total production estimates were lowered from 3.26 billion bushels to 3.2 billion, the reduction is over 60 million bushels of beans.

Ending supply stock estimates were down 40 million bushels. World ending stock estimates were lowered 1.5 million tons from 51.8 million to 50.3 million.

Soybean crush used 121 million bushels, a 19 percent drop and 3 million below market expectations.

Soybean export inspections fell to 5.6 million bushels from 10 million last week. The estimated numbers were bearishly more negative than market expectations.

Palm oil prices pulled back reducing support for soy oil and subsequently soybean prices. Palm oil exports have dropped 7 percent in a month due to higher prices.

China’s drought in the northwest agricultural region has hurt their crop, but the government is selling beans out of storage to keep prices below $10 per bushel. China continues buying U. S. soybeans where domestic bean auctions fail to sell above market prices.

India’s soybean belt has been dry but recent rains have alleviated yield reduction potential. Soybeans are setting pods at a normal pace on Indian bean fields.

Traders are assuming increased soybean acres in South America and increased world production.

Soybean export sales of 858,000 tons were well above market expectations. A large part of the sales included 222,000 tons of old crop beans to China. Logistically those beans will be difficult to ship within two weeks of this crop year along with a backlog of other beans ordered earlier for shipment this year.

Corn

Supply estimates for corn increased in the United States and the world. USDA has estimated corn yields of 159.5 bushels per acre, placing ending stock estimates above 1.62 billion bushels. The estimate last month was 1.55 billion.

Ethanol demand estimates increased 100 million bushels to 4.2 billion. Export sales continue at a rapid pace, but production potential now exceeds the current use rate. Export inspections of 41 million bushels were up 5 million bushels in a week.

U.S. corn is now 96 percent in the silking stage with a condition rating of 68 percent good to excellent. The average condition rating for this time of year is 59 percent good or better. One possible negative factor affecting yield potential is 40 percent has reached the dough stage — 64 percent is average.

Market traders expect the second largest crop in history. Traders believe farmers must sell stored corn to make room for the new crop.

Thailand announced 750,000 tons of corn for sale. Vietnam is working on an agreement with the Philippines to trade rice for corn. Weekly corn exports of 1.43 million tons were way above market anticipation. Low prices are the cure for low prices.

Wheat

Wheat ending supply estimates in the United States increased 37 million bushels from 706 million to 743 million. Market traders were expecting carryover supplies near 750 million bushels. Production estimates increased only slightly at 2.18 billion bushels.

Argentina has 27 percent less wheat than average. Argentina and Canada are both expected to see a million ton production decline. Wheat production estimates are lower in Asia and Europe as well.

USDA wheat condition ratings of 74 percent good to excellent are dramatically higher than the 54 percent average for this time of year.

Egypt banned the importation of genetically modified wheat, reducing demand for U. S. wheat but bought 120,000 tons from the United States within a tender for 270,000 tons. Japan bought 126,000 tons and Korea 48,000. India is selling stored wheat into the markets to curb food inflation.

Wheat contract prices set new lows in seven of eight sessions during the past 10 trading days.

Wheat exports remain below USDA predictions. Export inspections of 14 million bushels were down a million bushels from last week. Despite reduced world production, ample stored supplies more than make up the difference. The trend remains negative.

Rice

World rice use is expected to decline. India projects a decline in total rice production of 15 million tons. Rice supplies are declining in Vietnam where exports increased as prices dropped. Thailand, however, is refusing to sell at low world prices and releases few exports at higher prices. The stored rice in Thailand suppresses world prices. Rice market fundamentals of supply and demand are negative and so are short term technical indicators.

Rice markets are oversold. Rice exports were slow with total sales of 73,000 tons. Costa Rica bought 42,000 tons. The rest went to Canada, the UK, Mexico and Arabia. The price trend is lower.

Cotton

World cotton demand remains weak. Housing starts in the United States were lower than market expectations. Weakness in world stock markets is again putting pressure on cotton prices. Supplies are expected to decline below 6 million bales to 5.6 million. That number would represent tight supply if demand was average but demand is low making current production figures adequate to provide for world use.

Trader buying has lightened up substantially.

Crop ratings continue to improve. The current rating of 53 percent good to excellent is average and that is more than traders expected. Cotton prices are showing signs of stabilization but light trading may not be a reliable indicator.

The recovery of Chinese stock market prices is a supporting factor.

Export sales of 32,000 bales were bearishly below market expectations. It will be difficult for cotton prices to rise in the present environment but most of the negative news is already factored into current prices.

Closing notes: The pork industry has lost $4.5 billion in the past year. Pork producers are asking USDA for financial support. Cattle placed on feed increased 8.7 percent over July of last year. Lower corn prices moved more cattle into feed placements. Unseasonably favorable weather remains price bearish. Rain has graced every agricultural district between the mountain ranges in North America. Harvest time price pressure is on the horizon. Crop conditions are highly variable almost everywhere, making yield estimate accuracy more questionable. Markets fear government regulation of fund traders that could cause liquidation of buy positions.

e-mail: heartland.agriculture@yahoo.com