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Grain Comments: 06-06-2024

Good morning.

Ag markets are trading mostly in the green this morning after what has been another relatively dull overnight session. Volume in the night trade remains subdued while traders wait to see what this morning’s weekly export sales report has to offer. China still has zero new crop US soybean sales on the books, so we will see if that changes this morning. Otherwise, ag futures continue to be a product of weather and fund positioning, with managed money traders likely to start rolling their July positions forward in the coming days. Corn futures are trading 4-5 cents higher, soybean futures are trading 7-9 cents higher, and the Chicago wheat market is up 3-4 cents. Products are higher, soybean meal is up $1-2/ton, and soybean oil is up around 70 points. Outside markets are mixed, crude oil futures are up around 60 cents/bbl, the Dow Jones index is down 20 points, and the US$ index is up 10 points.

This morning’s weekly export sales report for the week ending May 30th is expected to show corn sales in a range of 600k-1.2 mil mt’s, soybean sales in a range of 175k-165k mt’s, and wheat sales in a range of (100k)-100k mt’s.

For the new crop, corn sales are seen at 0-300k mt’s, soybean sales are seen at 0-200k mt’s, and wheat sales are seen at 200k-55k mt’s. Estimates for both old and new crops would be in line with recent weeks.

Iowa became the tenth US state to report an infection of bird flu on Wednesday, when a dairy cow tested positive for the disease. The state is the tenth biggest milk producer in the US and is the first new state with an infection since late April.

In a weekly report, Brazilian ag agency ANEC estimated soybean exports out of the country in June to total 12.08 mmt’s, vs 13.84 mmt’s in June of 2023. Meal exports were seen at 1.98 mmt’s vs 2.20 mmt’s, and corn exports were seen at 1.05 mmt’s vs 1.23 mmt’s.

SovEcon, a private Black Sea research firm, lowered their estimate of the Russian wheat crop to 80.7 mmt’s, down from their previous forecast of 82.1 mmt’s. The group cites deteriorating crop conditions from hot/dry weather following May frosts as reasons for the cut.

Following the Bank of Canada’s 25 basis point rate cut on Wednesday, the European Central Bank looks to be the second group in as many days to lower their benchmark lending rates. This would be the first cut from the ECB in nearly five years.

Nvidia has now overtaken Apple to become the second largest company in the world and has become the first computer-chip company in history to hit $3 trillion in market value. The stock is up nearly 150% so far this year and will see a 10-for-1 split on Friday.

24-hour precipitation maps show rain yesterday again favored the East and the South. Eastern TX into LA look to have received some 0.5-2″, while like amounts were seen for large portions of KY, OH, and WV. Western Corn Belt was mostly dry.

Aside from a possible few small disturbance near the Great Lakes States, most of the Midwest looks to be dry into the weekend. Thursday marks the first day since April 29th that the storm prediction center does not see more than a marginal risk for severe weather anywhere in the US.

Week two forecasts trended wetter overnight for the Northern Plains into the Canadian Prairie, while most of the central US is seen in a drier bias. Otherwise, the overall pattern remains the same; a drier pattern will be seen for most of the Corn Belt into next week, when ridge-riding storms bring moisture that is hard for the models to predict.

Both the EU and the GFS are wetter for areas East of the Black Sea in the 10-day period. Confidence is low and this moisture will need to be pulled into the week-one forecast to have more credence.

Temps in this area continue to be seen some 10-20 degrees F above average over the next 10 days, which adds to stress without sufficient moisture.

Heat is also seen intensifying in Southern Brazil and Argentina, where temps here too are seen some 10-15 degrees F above average. This will aid in the remaining corn and soybean harvest but will adversely impact the Argy winter wheat seeding campaign.

Precipitation forecast for South America remains the same as recent runs; aside from far Southern Argentina and far Northern Brazil, most of the country sees little to no rain in the coming 10 days.

Have a great day!

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