Written Commentary
SOYBEANS
The soybean complex was mixed with soybeans closing $.12 – $.20 higher, meal was up $10 – $11 closing near session highs, while soybean oil was 70 – 90 lower. Soybean oil was overdue a correction from its overbought condition. Look for Aug-23 to consolidate near $.65 leading up to tomorrow’s report. Next resistance for Nov-23 is the July high near $13.92 with support at $13.15. Spot board crush margins have surged in recent weeks led by the sharp rebound in soybean oil. Its product value did correct 1% today to 43.7%. Soybean conditions improved only 1% to 51% G/E, below expectations for a 2-3% increase. 39% of the crop is blooming, vs. 35% Ave. 10% of the crop is setting pods, vs. 7% 5-year Ave. Current ratings suggest a yield of 51 bpa. China has reportedly been buying US soybeans for fall delivery, so far no confirmation via the USDA AM wire. New crop export commitments remain historically low. This afternoon Argentina’s Ag. Ministry did indicate their imports this year could reach 10 mmt, compared to the current USDA forecast of 8.4 mmt.
CORN
Prices closed $.01 – $.02 higher in choppy 2 sided trade. Dec-23 continues to consolidate in a $4.95 – $5.10 range and will likely to stay there until tomorrow’s USDA data. Good rains are expected this week across eastern NE, most of Iowa and MO, stretching east thru IL and much of the eastern corn belt. Much lighter amounts are expected across the NC Midwest and northern plains. Some talk of the high pressure ridge amplifying over the Midwest towards the end of the 2 week outlook. The NWS 8-14 day outlook shows above the MA normal temperatures across the bulk of the continental US, however mostly normal to above normal precip. across most key growing areas. Crop conditions improved 4% to 55% G/E above expectations. 22% of the crop is silking, vs. 21% 5-year Ave. 3% of the crop is in the dough stage. Current conditions suggest an average yield of 172.5 bpa. Look for weekly ethanol production to back off a bit from last week’s production pace of 1,060 tbd. The EIA report for weekly ethanol production is scheduled for 9:30 CST tomorrow.
WHEAT
Prices were higher across all 3 classes with Chicago and MGEX up $.11 – $.14, while KC was $.06 – $.07 higher. Spring wheat conditions slipped 1% to 47% G/E, having fallen now for 5 consecutive weeks. Given the forecast they are likely to fall again next week. Winter wheat conditions held steady at 40% G/E while harvest remains slow at 46% complete, below the historical average of 59%. Harvest in Kansas at 59% is well below the historical average of 84%. With the odds of renewing the GSGI looking increasingly unlikely Ukraine may be hard pressed to reach the already reduced corn and wheat export forecasts via transport thru Eastern Europe and the Danube river.
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