Corn prices extended their decline, reaching multi-month lows after the recent USDA crop condition report (published 14th August) that revealed better-than-expected corn ratings. US corn conditions improved for the second week in a row, reaching 59% good-to-excellent condition, up 2 percentage points from the week prior (57%), 2 percentage points higher compared to the same time last year (57%). As of 8th August, approximately 49% of national corn was in drought, yet market players have reported that there has been beneficial rainy weather over the last six weeks, although not all areas of the country have benefited. According to the weather forecast, rain should continue through the Eastern Corn Belt this week, but shortly after, rains might be limited again. According to market players, the final numbers of corn yields will require a bit more time to be established, but even a major decline in yield would still leave the US with sufficient corn-ending stocks.
The US winter wheat harvest progress is almost complete, reaching 92%. For the US spring wheat, the harvest progress is slightly behind the five-year average, with 24% complete as of 13th August. US spring wheat conditions are reported to be 42% good-to-excellent, up 1 percentage point from a week prior, 22 percentage points down compared to the same time last year (64%).
In addition to the beneficial crop rating report, Chinese demand for agricultural commodities (the largest commodity buyer) has also added downward pressure on grain prices. The industrial output and retail sales data came out on 15th August, showing how the Chinese economy encountered a further economic slowdown in July.