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Grain Comments: 06-07-2024

Good morning.

Markets are lower to start on the last day of the week, in a reversal of Thursday’s price action. Wheat futures are continuing their trek lower and look set to have one of their worst two-week stretches in more than a year. This morning’s action would suggest yesterday’s Brazil tax reform rally was a bit overdone. Bottom line, there is likely nothing that will happen until 2026 and the bill still has plenty of hurdles to go through before it becomes law. Corn futures are trading 1-2 cents lower, soybean futures are 6-10 cents lower, and the Chicago wheat market is down 8-11 cents. Products are lower, soybean meal is down $1-2/ton, and soybean oil is down 30 points. Outside markets are mixed, crude oil futures are up 40-50 cents/bbl, the Dow Jones index is up 10 points, and the US$ index is unchanged.

USDA yesterday announced the sale of 152,000 mt’s of corn for delivery to unknown during the 2023/24 marketing year. This was the second flash corn sale this week.

Turkey announced it would be suspending wheat imports from June 21st through October the 15th this year. The statement says depending on market conditions at that time, the suspension may be extended. Last year, Turkey imposed a 130% import tariff on wheat.

Census export data released Thursday showed corn exports for the month of April at 6.432 mmt’s, up 28% from last year. Soybean exports were seen 29.6% lower at 1.770 mmt’s, and wheat exports were up 33.9% at 1.925 mmt’s.

Compared to the USDA, census exports for corn are up 3.368 mmt’s through April, census exports for soybeans are up 1.164 mmt’s, and census exports for wheat are down 0.047 mmt’s.

Chinese customs data shows soybean imports in the month of May at 10.222 mmt’s; this was down 15% from last May’s record figure of 12.02 mmt’s. Cumulative imports through the first five months of the year were down 5.4% at 37.37 mmt’s.

StoneX lowered their estimate of the Brazilian 2024/25 wheat crop to 7.79 mmt’s, down 3.7% from the previous year. The group cited lower planted acres in Southern states including Rio Grande do Sul as the main reason for the reduction.

The Buenos Aires Grain Exchange (BAGE) released their weekly crop report late Thursday; the report showed soybean harvest in Argentina advanced 6.2% on the week to 92.2% complete, while corn harvest advanced 5% to 35.1% complete. No adjustments were made to their production estimates for either crop.

Same group also estimated Argentina’s 2024/25 wheat planting progress at 25.7% complete, up 16% from last week.

According to the United Nations’ Food and Agriculture Organization, global food prices were up 0.9% in May, led mostly by increasing wheat and dairy costs. This was the third straight month of increases.

Barge shipments down the Mississippi River in the week ending June 1 were up 10.2% from the week prior at 604k tons; Corn shipments were up 18.7% at 406k tons, and soybean shipments were up 5.6% at 187k tons.

This morning’s jobs report is expected to show employers boosted payrolls by 180,000 in May, while average earnings are seen advancing by 3.9% over the last 12 months, which would be the same as April’s rate. This would also be the 28th straight month below 4%.

Both the EU and the GFS see a small system bringing rainfall to the Central/Western Corn Belt tonight into Saturday afternoon, but the Midwest looks to be mostly dry through the weekend otherwise. The EU is drier, with totals of just 0.1″ to 1″, compared to the GFS’s 0.5″ to 3″ forecast.

Week-two forecasts continue to trend wetter for both models as well, with moisture now seen stretching as far South as Kansas. This is positive for US 2024 row crop development.

Heat will remain in the West through next week, before warm air starts to move Eastward. The models are slightly warmer for the West coast at the end of the one-week period than yesterday showed, which will need monitoring.

The EU model continues to try and trend wetter in the Eastern Black Sea region over the next 10 days, but confidence remains low. The GFS has not taken this wetter shift. Temps here remain some 10-15 degrees F above average through next week.

Scattered showers have been added for Southern Brazil/Northern Argentina in the 10-day period overnight, but here too confidence is low. temps are also seen moderating slightly in the 10-day period but will be above average in the meantime.

Have a great day.

 

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