Written Commentary
SOYBEANS
The soybean complex closed mixed. Both soybeans and meal are were higher in the spot market while deferred contracts were slightly lower. Nov-23 recovered to close back above $14 after trading nearly $.20 lower shortly after the AM reopen. This week’s high in Nov-23 beans is nearly $3 above the late May low. Oil was up 50 – 175 with Aug-23 oil having traded to its highest level in 13 months. Today’s high at 69.55 filled a gap on the charts from last June-22. Russia’s Ag. Ministry proposed extending a ban on rapeseed exports that is set to expire Aug 31st. The proposed extension would run from Sept 1 thru Feb. 29th 2024. Spot crush margins continue to surge, up another $.18 today to $2.36 bu., a 5 month high.
CORN
Prices settled back closing $.09 – $.10 lower. Much above normal temperatures are still expected to expand across the Southern plains and western corn belt early next week, extending into the early days of August. Longer range 11-15 day models are suggesting a relaxation of the high pressure ridge allowing cooler temperatures along with better prospects for rain. Dec-23 held support at its 50 day MA of $5.31 ¼. The BAGE held their Argentine corn production est. unchanged at 34 mmt, just below the USDA forecast of 35 mmt. An ave US corn yield of 175 bpa (down from current 177.5) would still leave carryout stocks over 2 bil. A yield of 170 would reduce stocks to 1.6 bil. still 200 mil. above 2022/23. This without changing the usage side of the equation. We’ve been pointing out for weeks the slow start to US new crop exports. Argentina is expected to announce another currency incentive program, this time attempting to persuade farmers into selling their recently harvested corn. US cattle on feed for July was in line with expectations at 98%. Placements however at 103% were well above expectations of 98%, while marketing were below expectations at 95%.
WHEAT
Prices were lower across all 3 classes with KC and MGEX down $.14 – $.15, while Chicago was $.25 – $.30 lower. Despite a 4th consecutive night of Russian attacks on Ukrainian port infrastructure there appears to be some hope a Black Sea grain deal can be renewed. Overnight Turkey’s President stated he hopes he can persuade Pres. Putin to resume negotiations. Russia’s foreign minister responded by stating “only when its demands are met, the potential for a new grain deal between Russia and its friendly partner Turkey will be possible.” This morning the UN stated Russian attacks on Ukraine’s infrastructure has a wide reaching impact on global food security suggesting many people will die with over 360 mil. people worldwide in need of humanitarian assistance. The BAGE reports Argentine wheat plantings have reached 92%, up from 86% last week. Planted area remained unchanged at 6 mil. HA. They also pointed out that 71% of the crop was planted in “fair” conditions, a big improvement over YA. China’s Ag. Minister said NE China has seen some relief from drought conditions with recent rains, however pointed out risks remain with the presence of El Nino. Ukraine’s Ag. Ministry estimates 5.9 mmt of the 2023 grain crop has been harvested. Russia’s Ag. Minister today claims that Russia has supplied 48 mmt of wheat to African nations and that all their promises will be honored. Not sure over what time frame this supposedly occurred. The USDA est. Russian exports to all sources for the 2022/23 MY were 45.5 mmt and 47.5 mmt for the current 23/24 MY.
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