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Ag Market View for July 6.23


The soybean complex was lower across the board with soybeans down $.15 – $.20, meal down $1 – $2, while soybean oil was 205 – 260 lower. Soybean oil closed yesterday’s session at extremely overbought levels with prices up $.20 lb. from the late May low. US soybean area in drought did drop 3% to 60%, I’d expect additional declines next week. Brazil is expected to export 9.44 mmt of soybeans in July, vs. 7.0 mmt in July-22. With longer range forecast non-threatening and demand weak the market is extracting some recently added weather premium. Export sales delayed until tomorrow. Export sales tomorrow are expected to range from 8 – 26 mil. for soybeans, 100 – 300k tons soybean meal, and 0 – 10k tons soybean oil. With no room for below trendline yields I’d expect Nov-23 soybeans to find support before reaching the $13 level.

Red barn


Prices surged $.12 – $.18 today with Dec-23 closing back above the $5.00 level for the first time since last week’s stocks and acreage report.  As expected the US drought monitor did show some easing of drought conditions across the central and eastern corn belt, while drought conditions deepened across the NC Midwest.  24 hour rainfall totals showed good rains, however spotty, across central IL, SE WI into MI.  Heavy rains will continue across the southern plains, delta region and southern Midwest over the next 5 days.  Drought conditions are expected to deepen across the Dakota’s and NC Midwest over the next week, however cooler temperatures will limit its impact on production prospects.  Both the 6-10 and 8-14 day forecasts suggest normal to above normal rainfall for all but the deep south.  Helping fuel today’s price gains was a significant improvement in Brazilian basis levels over the past week.  While US corn prices were still $.25 – $.35 bu. over Brazil thru Sept, the gap is the narrowest in months.  Brazil has been exporting soybeans a record pace in recent months to free up storage for this year’s record large 2nd crop corn harvest.  Their corn exports are expected to reach 6.34 mmt in July, a record high for the month, up from 5.63 mmt in July-22.  Brazil’s 2nd crop harvest has reached only 20% as of July 1st, down from 28% YA.  Stronger than expected ethanol production also provided a boost to corn prices.  Production rose to 1.060 tbd last week, the highest production level since Dec-22 and above expectations.  Despite the higher production, inventories fell to 22.3 mil. barrels, below expectations.  Overall gasoline consumption jumped to 9.6 mil. barrels per day last week, the highest since Dec-21.  Despite the recent uptick in profit margins and production, I still expect a 25 mil. bu. cut demand for ethanol in next Wed. WASDE report.  Export sales tomorrow expected to range from 8 – 24 mil. bu.  US corn area in drought also fell 3% to 67%.     


Wheat prices were mixed with MGEX steady to $.02 higher, KC within $.01 or $.02 of unchanged, while Chicago was $.12 – $.16 lower.  A band of heavy showers fell across southern KS and northern OK posing quality risk to HRW wheat left to be harvested.  An inside day for Dec-23 Chicago as prices have rebounded off a test of its 50 day MA at $6.72.  Japan Ag. Ministry purchased 116k on US and Canadian wheat.  Roughly half was Canadian red spring, with the balance a mix of US white, durum, and HRW.  Taiwan bought 56k of US milling grade wheat for shipment in late Aug-23 or early Sept-23.  A day after prices rallied on fear of reduced production in Russia, SovEcon raised Russia’s wheat export forecast 1.5 mmt to 47.2 mmt, slightly above the USDA forecast of 46.5 mmt.  US spring wheat areas in drought rose 4% to 19%, while winter wheat areas in drought fell 1% to 54%.  Export sales tomorrow expected to range from 5 – 15 mil. bu.    

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