Evening Report | August 1, 2022

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Corn crop conditions hold steady... As of Sunday, USDA rated 61% of the corn crop “good” to “excellent,” unchanged from last week. Traders expected a one-percentage-point decline in the top two categories. The amount of crop rated “poor” to “very poor” held at 14%, though there was a one-point increase in the lowest category.

USDA reported 80% of the crop was silking, up 18 percentage points over the past week but still five points behind the five-year average. The portion of crop in dough doubled to 26%, though that also was five points behind the five-year average.

Soybean crop ratings unexpectedly improve... USDA rated 60% of the soybean crop “good” to “excellent,” up one point from last week, whereas traders expected a one-point decline. The portion of crop rated “poor” to “very poor” held at 11%.

USDA reported 79% of the soybean crop was blooming, one point behind the five-year average for the date. The amount of crop setting pods stood at 44%, seven points behind average.

Cotton crop ratings improve... USDA rated 38% of the cotton crop “good” to “excellent,” up four percentage points over the past week. The portion of crop rated “poor” to “very poor” declined two points to 28%. In top producing Texas, 25% of the crop was rated in the top two categories and 36% was in the bottom two.

USDA reported 89% of the cotton crop was squaring, two points ahead of average. The amount of crop setting bolls was eight points ahead of average at 58%.

Spring wheat conditions improve... USDA rated 70% of the U.S. spring wheat crop “good” to “excellent” as of Sunday, up two percentage points from last week. Traders expected a one-point decline. The amount of crop rated “poor” to “very poor” declined one point to 7%.

Winter wheat harvest inches forward... U.S. winter wheat harvest advanced only five percentage points over the past week to 82% done, which was three points behind the five-year average. Most of the harvest is completed in the Plains and Midwest, while activity in the Pacific Northwest is well behind normal.

‘Some ways to go’ on key shipping arrangements for incoming ships into Ukrainian ports ... Key arrangements including procedures for ships still need to be worked out before empty vessels can come in and pick up cargoes from Ukraine using the new grains corridor, a senior London marine insurance market official said on Monday. “The standard operating procedures for vessels still need to be worked out and there are issues about crewing that still need to be resolved,” Neil Roberts, head of marine and aviation with the Lloyd’s Market Association, told Reuters. “There is some way to go,” said Roberts, whose association represents the interests of all underwriting businesses in the Lloyd’s of London insurance market.

Shipping companies and the insurers that cover vessels need to be assured that the journey is secure with no threat of mines or attacks to both the ships and their crews. These are typically covered in accepted maritime practices known as standard operating procedures.

The standard operating procedures will be finalized shortly and will then be made public, a United Nations spokesman said. Ships going in to collect a cargo will need to be inspected by the Joint Coordination Center (JCC) in Istanbul. “The new ships present a different set of logistical challenges and this will take some days. This is something the JCC Istanbul is still wrestling with,” Roberts said. “There needs to be patience to await developments as this is still a live conflict.”

Soy crush a little lower than expected... U.S. processors crushed 174.1 million bu. of soybeans during June, down 6.8 million bu. (3.8%) from May but up 12.3 million bu. (7.6%) versus year-ago. Traders expected soybean crush to total 174.6 million bushels. Through the first 10 months of 2021-22, soybean crush totaled 1.847 billion bu., up 2.3% from the same period last year. Over the final two months of this marketing year, crush needs to total 358 million bu., which seems achievable.

Soyoil stocks at the end of June totaled 2.316 billion lbs., down 68 million lbs. from May but up 215 million lbs. versus last year.

Corn-for-ethanol use unexpectedly declines from May... USDA reported corn-for-ethanol use of 442.0 million bu. in June, down 4.6 million bu. (1.0%) from May whereas traders expected at 3.3-million-bu. (0.7%) increase. Corn-for-ethanol use increased 2.4 million bu. (0.6%) versus June 2021. Through the first 10 months of 2021-22, corn-for-ethanol use totaled 4.447 billion bu., up 6.8% from the same period last year. To reach USDA’s forecast of 5.375 billion bu., corn-for-ethanol grind must run 7.0% above year-ago in July and August. At the current pace, corn-for-ethanol use projects to about 5.350 billion bu. for 2021-22.

Corn consumed for ethanol and other purposes totaled 492.3 million bu., down 11.5 million bu. (2.3%) from May but 985,000 bu. (0.2%) above year-ago.

Dried distillers grains with solubles (DDGS) production totaled 1.919 million short tons, up from 1.897 million short tons in May but down from 1.925 million short tons in June 2021.

Brazil soybean exports slow, corn shipments pick up... Brazil exported 7.5 MMT of soybeans in July, according to official government data, down from 10.1 MMT in June and 8.7 MMT in July 2021. Brazilian corn exports totaled 4.1 MMT last month, up from 1.1 MMT in June and 2.0 MMT last year.