Corn ended mixed, but little changed. Crop conditions fell as expected, and the most likely Central US weather trend through the end of July features ongoing heat and dryness, and thus further declines in ratings. Note that condition ratings begin to correlate rather strongly with NASS yield in the next 1-2 weeks. Simply losing yield across the C Plains suggests US yield is no better than 166 BPA. Until crop size is known, the market will find ample support on breaks.
The crop this week is pegged at 64% GD/EX, vs. 76% a year ago and the lowest for this week since 2012. Oats conditions also fell slightly amid ongoing moisture loss in the Dakotas. Key is that, in normal years, crop conditions erode seasonally into late summer. This trend is expected in 2017 without a rapid shift to cooler and wetter weather, which appears unlikely through the next two weeks. US corn ratings on Aug 1st are likely to range from 60-62% GD/EX.
South America’s cash market has likely bottomed, but will continue to steal demand from the US through autumn. Still, our work suggests US end stocks of 1.7-1.9 is becoming more probable, and so we’re not anxious to add to sales below $4.00, basis December futures.