Focusing on U.S. new crop numbers, USDA is still applying historical averages to assume nine percent abandonment and 845-pound average U.S. yield, on a planted 13.72 million acres to produce a 22 million-bale crop.  This implies a very healthy supply of 27 million bales.  Even with a strong assumption of 17 million bales of U.S. exports, the ending stocks outcome is 6.7 million bales. This fair-sized increase implies price weakness. Let’s focus on the major caveats.

But, on the other hand… maybe there are fewer planted acres than USDA is currently reflecting.  Maybe the March Prospective Plantings number was too low.  But now we have to consider the June observations of planted and yet-to-be-planted.  How much of the early June yet-to-be-planted didn’t get planted?  This uncertainty won’t be resolved until August at the earliest when both we and the World Ag Outlook Board have FSA certified acres.

So, at present, we have an apparently improving crop of somewhat unknown size.  The U.S. crop appears to be doing better, with roughly half of the U.S. and Texas crops rated “Good-Excellent,” and another quarter rated “Fair.”  For what it’s worth, the Texas crop condition is tracking mostly closely with 2014-2016 crops.  However, these weekly condition ratings don’t reliably explain differences in yield across years.

And, furthermore, because of the one to three weeks lateness of the crop, a lot is riding on the maturation/harvest period weather.  With the switch from an El Nino conditions to a neutral/sub-La Nina forecast, the possibility is greater there for the necessary open, sunny, dry fall weather.  Hopefully, there is enough subsoil moisture and timely rains to carry the U.S. crop through until then.