Written Commentary
SOYBEANS
The entire soybean complex closed lower with several contracts making new lows into the close. Soybeans were $.15 – $.22 lower, meal was steady to $3 lower, while oil 110 – 160 lower. Both Aug-23 beans and meal surged to new contract highs before reversing at midday. Aug-23 soybeans surged to $1.60 over Nov-23 before sliding back to $1.34 into the close. Last year Aug traded $1.80 over Nov just ahead of FND, and peaked at $2.85 just before expiration. Weekly export sales at 27 mil. bu. were in line with expectations. Old crop commitments are down 11% from YA, vs. the USDA forecast of down 8%. New crop commitments at 201 mil. bu. remain 63% below YA levels and lowest since 2019. The USDA did announce another sale of 256k tons (9 mil. bu.) of new crop to an unknown buyer. .
CORN
Prices closed $.05 – $.07 lower, unable to hold early strength. Dec-23 traded below support at its 100 MA, closing pretty much right on it at $5.42 ¼. As expected hot/dry conditions dominate much of the nation’s midsection thru the end of the week. The only rains of significance in the next 5-7 days are expected to favor the north central and eastern corn belt with likely no more than 25% of the entire corn and bean areas picking up over .50”. The 2nd week of the weather outlook remain mostly hot, however offers better prospects for normal to above normal precipitation. Export sales at 25 mil (1/2 old crop, ½ new) were in line with expectations. Old crop commitments at 1.577 bil. are down 34% from YA, vs. the USDA forecast of down 33%. New crop commitments have reached 192 mil. bu. the lowest since 2019 and down 36% from YA.
WHEAT
Prices were mixed with Chicago down $.03 – $.07, KC was steady to up $.01, while MGEX was up $.06 – $.08. – $.18 higher. Overnight there was another Russian missile strike on the port city of Odessa, damaging a storage terminal while killing a security guard. Pres. Putin claims Russia will provide between 25 – 50k mt of grain per month to 6 needy African nations, free of charge, to replace supplies that were lost from Ukraine. The Ukraine central bank believes the Black Sea grain corridor will remain closed thru the end of the year. It has been an inside trading session for the Dec-23 contracts in all 3 classes. Export sales at 9 mil. bu. were at the low end of expectations. YTD commitments are down 32% from YA and remain the lowest in at least 20 years. US winter wheat areas in drought fell another 3% to 47%, while Spring wheat areas in drought surged 12% to 43%. The wheat council crop tour estimates ND 2023 spring wheat yields at 47.4 bpa, just above the current USDA forecast of 47 bpa. Last year the tour estimated ND yields at 49.1 bpa, which were below the USDA forecast of 50 bpa. Based off current condition my model is forecasting ND yields at 46 bpa. I look for lower crop ratings and production in subsequent USDA reports. Taiwan Flour Miller’s Assoc. bought 108k mt of US milling wheat for Sept shipment.
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