Written Commentary
SOYBEANS
The soybean complex was mixed with bull spreading dominating trade in soybeans and soybean oil ahead of tomorrow’s FND. July soybeans soared $.32 with the July/Nov spread surging to a new high at $2.20. There are zero soybeans deliverable receipts with the CME. While old crop exports were supportive, I sense the market may be fearing a supportive June 1st stocks number tomorrow. Recall Mch 1st stocks were 65 mil. bu. below expectations. July-23 bean oil surged 120, Aug-23 was steady, while deferred contracts were down 30 – 60. Soybean meal was $1 – $3 higher. Old crop exports at just over 8 mil. bu. bring YTD commitments to 1.923 bil. down 13% from YA, vs. the USDA forecast of down 7%. With census exports running well above inspections at commitment data I’m leaning toward no change from the current USDA export forecast of 2.0 bil. bu. in the July 12th WASDE report. New crop export commitments at 123 mil. bu. are well below the 496 mil. at this point a YA. US soybean area in drought expanded 6% last week to 63%, the highest since Dec-22 and just below last fall’s peak at 71%.
CORN
Prices were down $.08 – $.09 with improving weather and weak export demand continuing to fuel to weaker trade. Radar has shown good rains moving east across central IL this afternoon. Weather models appear to be in consensus that 1.5”–3” of rainfall will benefit eastern NE, across southern Iowa, northern MO, into central IL along with the majority of the eastern corn belt over the next 5-7 day. Much lighter totals in the northern plains and SW corn belt including a large part of MO. As expected this week’s drought monitor did show expansion of drought conditions in the Midwest. If the current forecast pattern holds, drought conditions likely peaked this week. 100+ degree heat is pushing north and east into the southern corn belt from KS, MO, and Southern IL before cooling over the weekend. Shortly after tomorrow’s USDA data, markets will shift its attention back to precipitation totals and coverage which will drive production prospects and price direction for the next several weeks. The NWS 6-10 and 8-14 day forecasts continue to offer above normal precipitation for much of the continental US. There are zero corn deliverable receipts with the CME. Dec-23 corn filled a gap on the charts from early June. Old crop export sales were only 5.5 mil. bu. YTD commitments at 1.527 bil. remain at a 10 year low, down 36% from YA, vs. the USDA forecast of down 30. US corn area in drought expanded 6% last week to 70%, the highest since last fall’s peak at 71%. Brazil’s CONAB announced it will purchase 500k mt of corn to restart building public stockpiles. The IGC lowered its 2023/24 global corn production est. 6 mmt to 1.211 bil. mt, just below the USDA forecast of 1.223 bil. mt. Our June 1st stocks est. of 4.271 bil. bu. is down from 4.349 bil. YA, however just above the average trade est. of 4.250 bil.
WHEAT
Prices were mixed with MGEX up $.04 – $.07, Chicago down $.02 – $.04, while KC was $.05 – $.07 lower. July-23 Chicago held support at its 50 day MA of $6.45. There are 2,389 SRW wheat deliverable receipts registered with the CME, and 97 HRW receipts. Spring wheat areas in drought held steady at 15%, while winter wheat areas in drought expanded 5% to 55%, the highest in 4 months. Export sales were poor at only 6 mil. bu. YTD commitments at 155 mil. are the lowest in over 20 years and are down 27% from YA, vs. the USDA forecast of down 6.5%. The IGC raised its 2023/24 global wheat production est. 3 mmt to 786 mmt, still well below the USDA forecast of 800 mmt.
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