Our first report of the week came with our Weekly Inspection Report showing 47.3 million bushels were inspected for near term export. This is down from a high on the year last week of 54.7 but over a year ago of 35 and four week average of 39.5 m.b. Not bad off the recent 50 cent rally. It's that dreaded 4.00 plus area that hurts demand. Further highs will occur this month on corn prices and demand will soften with it, especially as harvest gets close, importers will sit on their hands and wait for lower cash harvest bids but for now this is a decent demand signal. After the close our crop condition report came out showing 68% of the crop is in good to excellent condition down from 70% of the week prior, 4% under our highest rating this year and 2% over a year ago. Well as expected the USDA was too high on ratings early on and waited for the crop to catch up but as too cool evenings had the crop dragging its feet they came a little lower to meet. In two weeks we will be even with a year ago if not next week. All considered it is a good crop rating. Key pollination comes to end the middle of next week on the latest planted corn, and then the ears fill out through late August. We came in on Monday with a bang as traders looked past the rain mid week and looked to the 7 to 14 day forecast calling for a heat dome to enter the Midwest this week end with some forecaster suggesting it could last through all next week. If you remember it was several weeks ago WXRISK.COM saw the C.A.S. Models of weather projections calling for a much warmer and drier August and September- this certainly is a start. Now can damage occur? Possibly but it would have to be very hot and little to no rain to see an appreciable yield drop as the bio-genetic seeds used like heat and need much less rain than its old seed varieties. Rain or no rain I called for a weather premium to be built in this week as we go through key corn pollination and enter the key pod setting stage for beans. Last year's key yield time brought a 1.25 cent corn rally and 2.25 bean Weather Premium Rally in August, even with good weather. This is what trend following funds due and that is trade the fear of what weather may bring before the fact. Watch out for Wednesday as the Crude Oil Inventory Report if Bearish again could pull grains down again on the open. Use it as a buying opportunity as part of our big step three rally phase is to look for more short covering and light long buying ahead of next Wednesday's big USDA Crop Report. Pre report trade estimates will vary with some looking for more corn acres seeded and less beans and others the reverse. However they all will trade one way and that the fear that they could all see lower acres seeded vs. the June 30 th Report as growers had the option to collect crop insurance and not gamble on severely late planting dates and weather. So expect shorts to cover and speculators to buy. The December corn has a minor accelerated support line at 3.62 on Wednesday then the bottom of the chart gap at 3.50 as buy points.
Monday's Weekly Export Inspection Report showed 4.5 m.b. of beans were inspected for near term export off from 9 m.b. the week prior, 10 m.b. last year and our four week average of 11.5. Not a good number but the key player China is in for old crop shipment for prior September 1 st delivery every other week so next week's number should be better. This is a neutral demand signal as China continues to purchase mostly for new crop delivery. The Crop Condition Report after the close showed 67% of the bean crop is in G-E condition unchanged for the third consecutive week and 4% over a year ago. Every week has been between the low of 66% and high of 68% so like corn the USDA is waiting for the crop to catch up to its ratings and if not they will come down as it is probably too high. On paper it is still a good rating but the pod setting is now setting in and this is when we make or break the yields through August 25 th . The call for heat and dryness to set in starting this week end looks to heed the weather premium something that still needs more pricing until we know the length of the heat domes stay but late week strength should surface as shorts cover and specs buy on fear the August 12 th Crop Report may cut acres planted this year. Watch out for Wednesday when the Crude Oil Inventory Report takes center stage and spills its influence over to grains. Buy breaks. November finds support at 10.10 on Wednesday- then 9.80.
Monday's Weekly Export Inspections came in at 13.5 m.b. vs. 12.4 the week prior and four week average of 12.7. It shows a continuation of low quality wheat demand but not enough to drive prices. The market awaits the spring wheat harvest and that is when the demand can drive the market. After the close the Crop Condition Report for spring wheat showed 71% of the crop is in G-E condition down from 74 the week prior but well over a year ago of 56%. Montana dropped to 37% G-E vs. 52 last week and that dragged percentages lower. It remains a very high rating and if holds should have a strong demand for the crop ahead of and during harvest. In the meantime wheat's the tail to the corn and bean market and assumes the followers roll. Stay long. Unless 5.50 is broken on December CBT Wheat and 6.00 on September Minneapolis Spring Wheat Futures. Remember Step 3 is the final phase of my 3 phase recommendation. Step 1 was we would see grains make lows for the month the third week of July. Step 2 was the fourth week of July would see month's end rally short covering and Step 3 and August 1 st to August 25 th period in which a weather premium would be build and buying prior the August 12 th USDA Crop Report. Step 1 and 2 were astounding successes on the week and so far Step 3 is coming to play but stay in touch as things can change quickly. After the August phase completes, we will lay out the markets mindset for September and October.