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Morning Market Review for July 10, 2020

July 2020 WASDE Preview. (Comments are updated by 7:30 a.m. Central Time.)

Corn, soybeans inch higher ahead of the morning’s reports

  • Corn up 3-6 cents
  • Soybeans up 6-8 cents, soyoil down $0.09, soybean meal up $2.4
  • Wheat mixed

*Prices as of 6:55 am CDT.

Editor’s Note: Our “Feedback from the Field” series is live! Click here to share your crop reports with other growers around the country via a short survey with freshly updated questions this week! We will update the interactive Google map with results throughout the day. Our most recent analysis just went live – check it out here. Thank you!

Good morning! USDA releases it’s monthly World Agricultural Supply and Demand Estimates (WASDE) report this morning at 11 a.m. CDT. While most of the adjustments from last week’s Acreage report are already priced in, the updated numbers will also provide more insights about global production estimates. Below is a brief preview of how the numbers could shake out today. Stay tuned to for up to the minute analysis as the report is released!

20-21 Corn Soy Production

USDA will adjust acreage in today’s WASDE report to account for last Tuesday’s Acreage Report adjustments. This will mean a 5-million-acre decrease for 2020 corn acres to 92 million acres and an increase to 83.8 million acres for 2020 soybeans.

While USDA has reported crop conditions as largely good to excellent for corn and soybeans – both of which were rated as 71% good to excellent in this week’s Crop Progress report – heat stress in the coming weeks during the key pollination phase could reduce yield estimates.

2019-20 Ending Stocks

The new acreage adjustments will shift new crop ending stocks across all three major grain categories. U.S. corn production could decrease by nearly 1 billion bushels on lower acreage. Both old and new crop decreases to ethanol demand are likely. In April and May 2020 alone, 355 million bushels of corn were not consumed for ethanol following the industry’s collapse during the COVID-19 pandemic. The total accounts for 3% of 2019 production which vanished from the demand pipeline and remains in grain bins across the country. Weak export demand could also add extra bushels to 2020/21 carryout. 2019/20 corn exports are 17% lower than the five-year average.

While domestic old crop soybean stocks are largely expected to remain unchanged, analyst estimates expect new crop stocks to tighten by 171 million bushels. Reductions to export demand are likely, especially considering old crop soybean exports are nearly 20% lower than the five-year average. Export reductions will considerably offset the increased acreage from last Tuesday’s report, which will add nearly 10 million bushels to 2020 production estimates.

USDA’s revised 2020 wheat acreage of 44.3 million acres will tighten new crop supplies, but 2019/20 ending stocks are likely to rise on lower old crop exports. Old crop exports totaled 912 million bushels; 38 million bushels lower than USDA expectations.

World 19-20 Ending Stocks

Global stocks for 2019/20 are expected to rise in today’s report. New crop wheat stocks are expected to tighten. New crop Russian and French wheat production estimates could be lowered. Farm offices and consultancies in both countries slashed output forecasts this week after a dry growing season diminished yield potential.

U.S. World Production


Corn futures prices held steady in overnight trade ahead of this morning’s reports. Hot and dry forecasts underpinned marginal gains ahead of the opening bell. September futures inched up half a cent to $3.4925/bushel. New crop December futures added a quarter cent to $3.5725/bushel.

Cash corn prices held mostly steady yesterday ahead of today’s USDA reports. Basis rose slightly at two processing facilities in Cedar Rapids, Iowa and Blair, Nebraska. High cash corn prices across the Corn Belt have spurred steady sales of both old and new crop supplies in the past week. Farmers will likely wait until today’s report results before booking more cash sales.

Corn basis and change

China was the top buyer of U.S. corn last week, as U.S. exporters shipped 16.0 million bushels to the world’s second largest economy. Weekly corn exports were slightly up from last week at 42.7 million bushels but 11% below the four-week average. Soybean exports gathered much needed momentum going into the final weeks of the marketing year, coming in at 17.2 million bushels for the week ending July 2. Wheat exports also improved from last week to 15.1 million bushels as the new marketing year continues stronger than expected shipping pace.


The soy complex is on track to post gains this morning on a steamy weekend weather forecast. August soybean futures rose $0.015/bushel to $8.98, flirting with the pivotal $9/bushel benchmark. August soyoil futures dipped a penny lower to $28.28/lb while August soymeal futures gained $0.1/ton to $297.4.

Cash soybean prices rose slightly on the Mississippi River at Davenport, Iowa yesterday. Spot basis bids were largely unchanged elsewhere across the Midwest. Futures prices nearing $9/bushel have spurred a new round of cash sales over the past week. Farmers are awaiting results of this morning’s WASDE report before booking any new sales.

Soybean Basis Change

Soybean exports gathered much needed momentum going into the final weeks of the marketing year, coming in at 17.2 million bushels for the week ending July 2. Wheat exports also improved from last week to 15.1 million bushels as the new marketing year continues stronger than expected shipping pace.


Wheat contracts price changes

Wheat futures backed off two-month highs in anticipation of world stock reports this morning. Regardless, Chicago futures remain on track to post a 6.5% weekly gain on reduced production estimates from major wheat producers around the world. A rising dollar also contributed to lower prices in the wheat complex this morning.

Cash soft red winter wheat bids dropped $0.14/bushel to $0.05 over September futures prices at a Chicago processing facility yesterday. Rising futures prices and continuing harvest progress in Kansas have spurred a steady round of new cash sales. Farmer sales have slowed in Texas and Oklahoma as the wheat harvest is largely complete.

Cash offerings for hard red winter wheat held steady across the Southern Plains yesterday. Ongoing harvest activity in Kansas, the largest wheat-producing state in the nation, continued to limit cash gains yesterday.

Protein premiums for hard red winter cash wheat delivered to or through Kansas City by rail shifted for all levels of protein content yesterday, as shown below:

wheat protein content, basis range, change

Lower yield estimates out of Russia, France, and the U.S. as well as reduced acreage estimates in Argentina and Britain earlier this week has led to funds exiting short positions on Chicago and Kansas City wheat futures as prices have rallied. The weather adjustments will likely reduce wheat stocks, Total Farm Marketing’s Naomi Blohm writes, but supplies will remain high. For more on where the wheat markets are going, check out her latest Ag Marketing IQ column.

Weather: Another day of toasty temperatures will bake much of the central growing region of the U.S. today. Temperatures in the 90’s-100’s could halt crop development as pollination nears. Rain is possible later tonight in the Ohio River Valley and Dakotas, according to NOAA's short-range forecast. A rain system over the Northern Plains could shift into the Upper Mississippi River Valley tomorrow, leaving up to an inch of rain in its wake. Don’t’ forget to take sunscreen and extra water if you are going to be working outside over the weekend!

Financials: Coronavirus cases in the U.S. rose by 63,024 overnight to 3,118,168 cases as of this morning according to the Johns Hopkins Coronavirus Resource Center. The death toll increased by 982 lives to 133,291 deaths as of press time.

A 2021 agriculture spending bill passed the House Appropriations Committee on Thursday afternoon. Food security was top of mind for legislators in the wake of supply chain meltdowns following the pandemic as discretionary funding increased $487 million from 2020’s Agriculture-Rural Development-FDA bill to 23.98 billion. But it remains unknown whether or not the bill will pass in the Senate, Farm Futures’ policy guru Jacqui Fatka writes. For more details on spending breakdowns, check out her latest D.C. Dialogue column.

Additional funding for new specialty crops in the Coronavirus Food Assistance Program (CFAP) will come available today. However, alfalfa hay production remains noticeably absent from the list of crops as updated by USDA. Producers can apply for the new commodities starting next Monday. Applications can be accepted at local FSA offices until August 28, 2020.

American Farm Bureau Federation’s president, Zippy Duvall, has been diagnosed with COVID-19, the agency’s VP of communications reported. Duvall “remains in good spirits” and is quarantining at home. 

U.S. stock futures dropped this morning as investors flock to government bonds on concerns about looming COVID-19 lockdowns. New cases reported yesterday topped the highest rate seen in the U.S. since the pandemic began in late February. S&P 500 futures edged 9.60 points or 0.31% lower to $3,131.50 on the new round of coronavirus-induced stock jitters.

Chinese state media have signaled concerns about short-term stock overshooting following Chinese stock rallies in recent days. The Shanghai Composite Index rose 16.5% over eight days but closed 2% lower this morning.

The jittery market sent energy futures tumbling as U.S. sweet crude futures slipped $0.52/barrel lower to $39.10. Gasoline futures dropped $0.0157/gallon this morning to $1.2362.

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