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Ag Market View for July 25.23


The soybean complex closed mixed with soybeans down $.03 – $.08, meal up $4 – $7, while oil was mixed with nearby contracts up 30 – 60, with back months down 50 – 60.  It was an inside trading session for soybeans and oil.  Aug-23 meal made a new 3 month high stopping short of resistance at $456.  Spot board crush margins surged another $.28 today to $2.81 bu., a 7 month high.  Tomorrow the EIA will release their monthly Energy Review which will breakdown the April-22 biodiesel and renewable biodiesel production figures.  Soybean conditions slipped 1% to 54% G/E, in line with our expectations.  The CC index fell to 79.4, its lowest late July reading since 2012.  We est. the projected yield at 51.3 bpa, down from 51.5 bpa LW and below the July-23 USDA forecast of 52 bpa.  70% of the crop is blooming, vs. 5-year Ave. of 66%.  35% of the crop is setting pods, vs. 31% Ave.  Dr. Michael Cordonnier kept his yield forecast unchanged at 50.5 bpa, however maintains a lower bias.  US soybeans are now cheaper than SA origin starting in Oct-23.  Expect to start to see a pick-up in China purchases.  Yesterday’s announced sale of 4.5 mil. bu. to China was the first in nearly a month.  Sales continue to run well below the historical norm.

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Prices recovered to close $.02 – $.03 lower.  Slightly higher trade overnight in Dec-23 failed to take out yesterday’s high at $5.72 ¼.  Prices set back to support at $5.55, the midpoint between the June high and the July low before recovering the last hour of trade.  Temperatures are heating up this week with much of the Midwest experiencing highs in the upper 90’s to 100+ readings.  Some ridge riding storms may fire around the high pressure ridge, with scattered coverage expected to favor the northern states.  The high pressure ridge is still expected to compress and shift west offering better prospects for rain and slightly cooler temperatures by early next week.  Crop conditions held steady at 57% G/E, vs. expectations for a 1-2% increase.  The CC index held steady at 80.1, the lowest since 2012.  Current conditions suggest a yield of 173.6 bpa, vs. the July-23 USDA est. of 177.5 bpa.  68% of the crop is silking, just above the 5-year Ave. of 65%.  16% of the crop is in the dough stage, just above the average of 14%.  Dr. Michael Cordonnier lowered his projected yield 1 bpa to 174 bpa while also maintaining a negative bias moving forward.  UkrAgroConsult estimates Ukraine can export 2 – 2.5 mmt of agricultural products per month via truck/rail thru neighboring European countries.  These truck/rail est. seem a bit higher than most others.  Shipping capacity thru the Danube river could add another 2.2 – 2.5 mmt per month.  USDA projected exports of Ukrainian corn, wheat and sunflower oil for the 2023/24 MY is roughly 35 mmt, and historically account for roughly 75% of their total ag. exports.  The recently announced currency incentive program in Argentina has so far failed to generate much selling interest from farmers.  They are being offered 340 peso to the US dollar, roughly 25% above the current market rate.  Ethanol production tomorrow is expected to slip at bit from last week’s 1,70 tbd.


Prices were mixed in a choppy 2 sided trading session.  All 3 classes made new highs for the recent move in the overnight session.  Chicago wheat was up $.02 – $.04, while both KC and MGEX were $.03 – $.05 lower.  While there were no major headline news from the Black Sea region, tensions remain high.  The UN continues to urge Russia to renew the Black Sea Grain Initiative while Russia maintains they will when all their conditions are met.  Russian media has reported Pres. Putin will met with African leaders this Fri. with grain supply corridors expected to be a key topic of discussion.   They also report that Putin intends to meet with Turkish Pres. at the Turkish capital, however no date has been set.  The IMF reports that global grain prices could rise 10-15% with the collapse of the BSGI. SovEcon est. Russian wheat harvest at 14%, down from 22% YA.  Spring wheat conditions fell 2% to 49% G/E, vs. expectations for unchanged.  Current ratings suggest an average yield of 43.8 bpa vs. the July USDA forecast of 45.2 bpa.  94% of the crop is headed.  US winter wheat harvest advanced 12% to 68% complete, vs. the 5-year Ave. of 77%.  There were still 8 states reporting winter wheat crop conditions.  5 states reported lower ratings, 2 were unchanged, while 1 increased (Oregon).  Current ratings suggest winter wheat production at 1.225 bil. bu. with an average yield of 47.7 bpa, vs. the July USDA est. of 1.206 bil. and yield of 46.9 bpa.

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