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Grain Comments: 06-14-23

Corn, soybeans, and wheat were all 4 to 6 cents lower overnight as profit taking developed. The Us dollar was weaker, energies were higher, and equities were mixed.

 

Today’s Reports: FOMC meeting, Weekly Ethanol Numbers

 

  • 2023 RFS decision delayed to next week
  • Analysts lower US soybean acres
  • Technicals driving futures

 

Weather has had more of an impact on futures trade than normal for this time of the year in recent weeks. We may now start to see even more weather driven trade as we approach the start of the pollination window for corn. Much of the US corn crop will pollinate in early July, and weather models remain mixed for much of the Corn Belt. Extreme heat can have a negative impact on pollination, as can a lack of precipitation. While we have seen rick premium both added and taken out of futures in recent weeks now is when trade will start to really show more interest in how much premium needs to be in futures. There are other factors that will determine how much premium needs to be added than just weather however, with demand being a primary one. Demand for US commodities has trailed off in recent months as the larger crops out of Brazil make their way into the global supply line. Total demand for US commodities is shrinking as importers have shifted their overall buying patterns as well. Given this change it makes it less important for the US to have large volumes of commodities to export and does take some of the urgency away from buying on crop loss possibilities without actually seeing proven yield loss.

 

Highlights

* War impact will last for years in Ukraine

* Goldman sees lower global crude oil demand

* OPEC holds crude demand unchanged

* Feed importers look for cheap alternatives

* Wheat usage most noted offset to corn

* Argentine movement -62% from 5-year average

* US ethanol values +5 to 10 cents from last week

* DDG values $15.00/ton lower

* US Farm Bill expires in 4 months

* No indication of potential program changes

 

Corn

* YTD corn values -9.8%

* New crop demand estimates too high

* Brazil harvest gaining momentum

* Ukraine exports +21% on the year

* Supply/demand changes starting to offset

 

Soybeans

* YTD futures -8.8%

* Demand outlooks remain mixed

* Brazil values weaken

* Groups push White House for more biofuel use

* Deadline for blend decision expected today

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