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Grain Comments: 06-12-23

Less than forecast weekend rainfall supported overnight trade with corn 12-14 cents higher, soybeans up 8-10 cents, and wheat gaining 3-5 cents. The US dollar and energies were weak while the equity market was firm.

 

Today’s Reports: Crop Progress, Export Inspections

 

  • Canada joins US in Mexico GMO fight
  • China reduces soy oil import forecast 60%
  • US S&P turning bullish, draws managed money

 

Now that the monthly WASDE data has been released trade will quickly revert to daily weather forecasts for much of its price discovery determination. Much of the Corn Belt is now showing drought conditions given the lack of precipitation over the past several weeks. Forecasts have started to turn wetter though and rains have moved through the US to limit market response to dry conditions at this time. If we remain dry through month end trade will start to show more concern and premium will be added accordingly. While weather is the main source of fundamental influence on futures, managed money flow is having the greatest impact on market movement on a whole. We will soon start to see this crowd, along with several others start to position for the USDA reports that will be released at the end of the month, these being quarterly stocks and planted acreage data. At this time trade is paying more attention to acreage but we could easily see a surprise from the inventory numbers. This data release also comes at quarter end which will likely elevate market positioning even more. For today’s session trade will await the weekly crop report that is expected to show further deterioration to crop ratings.

 

Highlights

* El Nino building into summer months

* US corporate bankruptcies highest since 2010

* US recession odds at 25%

* Some US crush plants put on hold

* Ukraine fighting has intensified

* Japan stock market at 33-year high

* China YTD soy imports +11.2%

* Brazil increases farmer funding

* Funds to be used for ag improvements, including irrigation

* Market now starting to focus on month-end reports

 

Corn

* US 22/23 carryout 1.45 bbu

* 23/24 US ending stocks 2.25 bbu

* 23/24 stocks/use 15.6%

* 23/24 carryout highest in 7 years

* Trade questions high Ukraine crop estimate

 

Soybeans

* US 22/23 carryout 230 mbu

* US 23/24 ending stocks 350 mbu

* 23/24 stock/use 7.9%

* New crop carryout highest in 4 years

* Chinese demand left unchanged

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