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Ag Market View for July 18.23


The soybean complex finished mixed with beans up $.12 – $.17, meal was up $7 – $9, while oil was 50 – 70 lower.  Nov-23 traded above $14 intra-day and to its highest level in 6 months before backing up into the close.  Spot Aug-23 meal surged to a 3 month high, next resistance is the April high at $456.  Spot oil continues to chop around near $.65 lb.  Soybean conditions improved 4% to 55% G/E, above expectations for a 2% increase.  The CC index improved to 79.6, up from 78.9 LW.  While this remains the lowest level since 2012, it has significantly narrowed the gap from its 5-year Ave.  Crop improvement was widespread as 16 states saw its CC index improve, with only 2 declining.  Current conditions suggest an average yield of 51.5 bpa, just below the current USDA forecast of 52 bpa.  20% of the crop is setting pods, vs. 5-year Ave. of 17%.  Dr. Michael Cordonnier kept his soybean yield unchanged at 50.5 bpa with production at 4.170 bil.

Grain bins at dusk


With not much rain being offered across the nation’s midsection over the next 5-7 days, fears are growing that an expanding high pressure ridge will produce widespread 100+ degree heat across the southern plains and western corn belt next week into early August.  The fear of record breaking heat with little to no moisture reserves lit a fire under the corn market today.  Prices surged $.25 – $.30 today closing above its 50 day MA.  So much for stiff resistance between $5.25 – $5.30.  Next resistance is the 100 day MA at $5.44.  The first 2 contracts of oats settled up their daily limit of $.25.  With yesterday’s lower close in corn tells me the market had pretty much already discounted the expiration of the BSGI.  I suspect today’s rally was almost entirely based on weather.  Much of the central and western corn belt will be in the silking or early dough stage next week when the MA normal temperatures arrive.  Crop conditions and production prospects will likely decline after 3 weeks of modest improvement.  Conditions last week improved 2% to 57% G/E, in line with expectations.  Big improvement across the eastern corn belt with PA up 20%, TN up 10% and IN up 7%.  Current condition suggest an average yield of 174 bpa with production of 15.020 bil. compared to last week’s USDA forecast of 15.320 bil. and yield of 177.5 bpa.  47% of the crop is silking, just above the 5 year Ave. of 43%.  Dr. Cordonnier kept his corn yield at 175 bpa and production at 15.10 bil., however stated he has a lower bias moving forward.  Chinese corn imports in June-23 totaled 1.85 mmt, down 16% from June-22.  YTD imports at 12.03 mmt are down 11.5% from YA.  A group of small refineries are challenging the EPA decision from last Friday not granting them exemptions from blending bio-fuels into their fuel mix.  The small refineries claim that by being forced to blend bio-fuel or buy RIN’s (renewable identification credits) they are exposed to undue harm.  Tomorrow’s report from the EIA is expected to show ethanol production rebounded from the 1,032 tbd pace from the previous week. 


Prices were mostly higher with Chicago up $.16 – $17, KC was up $.12 – $.13, while nearby MGEX wheat contracts were within $.01 of unchanged.  Today’s rally in Dec-23 Chicago stopped near its 100 day MA at $6.95.  MGEX was the weakest of the 3 as crop conditions improved more than expected.  Spring wheat conditions improved 4% to 51% G/E.  Current conditions suggest an average yield of 44.1 bpa, below the current USDA forecast of 45.2 bpa.  WW harvest advanced 10% to 56% complete, well below YA and 5-year Ave. of 69%.  IKAR raised their 2023 Russian wheat production forecast .5 mmt to 86.5 mmt, above the USDA est. of 85 mmt.  They forecast exports will reach 46 mmt, just below the USDA est. of 47.5 mmt.  Overnight Russia launched missile and drone attacks on the Ukrainian port city of Odesa, likely in retaliation to Ukraine’s attack on a bridge connecting Crimea to the mainland.  While most of the missiles and drones were shot down by air Ukrainian air defenses, some infrastructure damage did occur.   

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