Written Commentary
SOYBEANS
The soybean complex closed mixed. July-23 soybeans closed $.11 higher while deferred contracts were mixed. July-23 surged to a new 2 month high, trading above both its 50 and 100 week MA in the process. Next resistance is $15.01. Soybean meal was down $1 – $4 while soybean oil was steady to 20 lower. Last week Money managers were buyers of 34k contracts of soybeans, 27k soybean oil, while net sellers of just over 5k soybean meal. Their combined long position in the soybean complex jumped to over 117k contracts, the largest in 2 months. Dr. Michael Cordonnier lowered his US soybean yield .5 bpa to 51 bpa with production at 4.440 bil. bu., 70 mil. below the June-23 USDA forecast. He also lowered his Argentine production est. 1 mmt to 21 mmt, well below the USDA forecast of 25 mmt. Chinese custom data confirmed the surge in soybean imports in May at 12.02 mmt, up 24% from May-22. Brazilian soybeans accounted for 91% of these imports with only 7.7% coming from the US. The weekly export inspections were released after today’s close of trade. Export inspections at 7 mil. bu. were at the low end of expectations and below the weekly pace needed to reach the USDA export forecast. YTD inspections are down 4% from YA, vs. the USDA forecast of down 7%.
CORN
Prices were mixed from down $.01 to up $.04. July-23 stopped just shy of it April high at $6.47 ½ before pulling back. Dec-23 surged to its highest level since Dec-22. Weather over the 3 day weekend was mostly as expected. Some beneficial rains fell in Central Iowa, Missouri, and Western IL, otherwise drought conditions deepened across the Northern Plains, northcentral Midwest and eastern corn belt. Above normal rains continue to plague the SE along with much of Kansas. Intense heat was restricted to Texas and parts of the western corn belt. Rains this week are expected to again favor the SE and western NE up thru the northern plains. This still leaves a wide area of the central corn belt with little to no rain until at least the early half of the following week. The extended forecasts are trying to introduce better prospects for rain in the 7 – 10 day outlook across the central Midwest, however still with only normal to below normal readings. AgRural reports Brazilian 2nd crop harvest is just shy of 5% complete, behind the 11% pace from YA. Dr. Michael Cordonnier lowered his US corn yield 1 bpa to 177 bpa with production at 14.770 bil. bu., down 495 mil. from the June-23 USDA forecast. He also increased his Brazilian production est. 1 mmt to 130 mmt, just below the USDA forecast of 132 mmt. Export inspections at 35 mil. bu. were at the low end of expectations and below the 42 mil. bu. needed per week to reach the USDA export forecast. Inspections were a 10 week low and brought YTD inspections to 1.259 bil., down 31% from YA, vs. the USDA forecast of down 30%.
WHEAT
Prices were mixed with Chicago up $.06 – $.09, KC down $.03 – $.06, while MGEX was down $.04 – $.05. Heavy rains forecast for the Northern plains this week if verified would greatly benefit the drought stressed spring wheat crop. Export inspections at 9 mil. bu. were in line with expectations. I look for winter wheat harvest to have reached 18 – 20% as of Sunday, up from 8% last week. Last week MM’s were net buyers of 6k Chicago wheat while sellers of 3.5k KC wheat. Russia maintains they will not extend the BSGI beyond the current July 18th deadline. IKAR estimates Russian wheat export price $228/mt last week, up $5 from the previous week. SovEcon estimate Russian wheat exports last week were 560k mt, down from 700k the previous week. Trade sources est. Algeria purchased 630k mt of wheat in their recent tender, most from Russia. 300k mt was bought at $261.50/mt CF with the balance likely between $262.50 – $264.50/ mt CF.
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