USDA crop conditions and progress reports were released this afternoon and they show what most in the trade have come to expect, namely crops in outstanding condition.
Corn held steady with 74% of the crop rated Good/Excellent with the overall crop rated 93% Fair to Excellent. Remarkable!
Soybeans held steady from the previous week as well with 72% of the crop rated Good/Excellent but that masks the fact that the share of the crop rated Excellent moved up 1% to 19% with the gain coming from the Good category which lost 1% to it.
On the Corn progress front, which will now take on more significance since the word, "frost" is showing up, 95% of the crop is in the dough stage compared to last year at 91% and the 5 year average of 94%. 69% of the crop is dented compared to 61% last year and the 5 year average of 74%. 15% of the crop is now fully mature compared to only 8% last year and the 5year average of 26%. I maintain that this is the result of the ample rainfall which has kept the plant putting more energy into the ears rather than shutting down as the more seasonal dryness tends to produce. My view is that the lag in maturity is going to produce larger ears and more full kernels leading to an overall increase in the size of the crop when it comes to total production. Of course all of this will take a back seat now that the forecasts are showing some frost potential. Traders are going to be monitoring forecasts with the same intensity that we monitor the forecasts in late June/July for ridge and heat. Without any frost damage however, this crop is going to get bigger.
Ditto for the soybeans as far as to the relative maturity of the overall crop.
12% of the crop is dropping leaves compared to 10% last year and the 5-year average of 17%. In the Delta, Louisiana is 66% compared to the 5-year average of 57% while Mississippi is at 39% compared to the 5-year average of 47%. Arkansas is at 32% compared to the 5-year average of 22%. The South is in good shape. Then again, frost is rarely, if ever, an issue for down that way this time of year.
The big Three, Illinois, Iowa and Indiana are all lagging the 5-year average on leaf drop at 7%, 3%, and 18% compared to 11%, 10% and 23% respectively.
Since frost talk is out there we should look at Minnesota, Wisconsin and North Dakota. Minnesota is at 3% leaf drop compared to 6% last year and the 5-year average of 15%. Wisconsin is at 2% compared to 0% last year and the 5-year average of 7% with N. Dakota at 19% compared to 31% last year and the 5-year average of 25%.
What the crop needs right now is continued warmth/ seasonal temperatures and only moderate to light rains. As we get more leaf drop, dry weather is then needed/desired to facilitate harvest.
Again, traders will thus be glued to the forecast models before completely removing any weather premium left in these markets.
Incidentally, the Goldman Sachs Commodity Index notched a fresh 22 month low in today's session.
I am sure of one thing however; this will be completely missed by the gold perma bulls who will continue with one bullish prediction after another in spite of the soaring US Dollar and a sinking commodity complex. Eventually they will get it right but then again, when you keep saying the same thing year after year after year after year, eventually the market turns and you can then declare yourself a genius and a far-sighted prophet while you hope your acolytes will forget your many repeated blown calls. How sad that some continue to feel the need to make price predictions. As said many times here before, what is the point? It serves utterly no purpose whatsoever except to feed egos.
Good traders learn to read the tape and let the market predict itself. Even at that, they sometimes get it wrong. So what? At least they are humble enough to realize when they are incorrect and adjust or adapt and either get out of the way before they are harmed severely or go with the flow and profit thereby. They are flexible; not dogmatic nor wise in their own eyes.
Gold has been in a bear market ever since it broke down below $1530. No amount of manipulation claims, bullish predictions, wild theories, etc., have done a single thing to change that. Nor will they ever. When it turns, it will turn; not because some would-be psychics or self-proclaimed insiders claim it will but because the fundamental conditions that bring in money flows will change in the minds of traders.
I have traded in many different commodity markets over many years and I must admit I have never seen any market quite like gold in which so many possess such a cult-like mentality towards an inanimate object, a lump of yellow metal. It is quite disturbing to see what are no doubt otherwise rational and intelligent human beings acting in such an irrational and foolish manner and throwing all objectivity out of the window.
"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat
Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput
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