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Grain Comments: 06-18-2024

Good morning.

Overnight markets have been fairly quiet to start Tuesday on light volume in the overnight trade. Traders are a bit stuck between a weather forecast that is less than ideal for the Midwest (too much rain in the NW, too much heat in the East), and crop condition ratings that continue to show one of the better starts to a growing season in recent years. Heat isn’t necessarily a crop killer as long as you have sufficient moisture with it; and following a wet Spring, most areas still have this moisture. Markets appear range-bound until the USDA releases its June quarterly stocks and acreage estimates in another seven trading sessions. Corn futures are 1-2 cents higher, soybean futures are 2-3 cents higher, and the Chicago wheat market is down 3-4 cents. Products are mixed, soybean meal is up $3-4/ton, and soybean oil is down 5 points. Outside markets are also quiet, crude oil futures are down 5-10 cents/bbl, the Dow Jones index is down 20 points, and the US$ index is up 20 points.

Yesterday’s weekly crop progress update showed that as of Sunday June 16th, US soybeans were 93% planted, up from 87% the week prior. Kentucky is the slowest state, with just 78% of the crop in the ground.

Soybean conditions were at 70% g/ex, down from 72% last week. Best rated crops in Louisiana (88% g/ex) and Nebraska (79% g/ex). Worst rated crops in Illinois (61% g/ex) and North Carolina (61% g/ex).

Corn conditions in the g/ex category came in at 72%, compared with last week’s reading of 74%. Best rated crops in Pennsylvania (91% g/ex) and Nebraska (81% g/ex). Worst rated crops in North Carolina (52% g/ex) and Texas (59% g/ex).

On emergence, corn was 93% emerged (up from 85% last week), soybeans were 82% emerged (up from 70% last week), and Spring wheat was 95% emerged (up from 87% last week).

Winter wheat conditions were seen at 49% g/ex, which was a surprising 2% increase from last week. Harvest progress is seen at 27% complete, up from 12% last week. Spring wheat ratings were up 4% to 76% g/ex.

According to Chinese customs data, corn imports in the month of May totaled 1.050 mmt’s, down 11% from April, and down 36.8% from May of last year. Cumulative YTD imports are down 0.5% from last year.

Soybean imports totaled 10.220 mmt’s, up 19.3% from April but down 11.6% from May of last year. Cumulative YTD imports are down 5.4% from last year.

Other notable import data for May includes 1.86 mmt’s of wheat (+61% y/y), 1.61 mmt’s of barley (+26.4% y/y), 80k mt’s of pork (-41.1% y/y), and 230k mt’s of beef (+30.7% y/y).

Also out of China, the Ministry of Finance announced Tuesday it has allocated 443 mil yuan ($61.1 mil USD) for a disaster relief fund to support ‘drought prevention work’ in seven provinces. Officials say the fund will be used for work such as watering, replanting, and adding fertilizer in areas affected by recent heat and lack of rainfall.

The weekly ethanol production report, typically out on Wednesday mornings, will be released Thursday this week at 10am central time due to the holiday on Wednesday.

The Australian Central Bank left its key interest rate unchanged yesterday at 4.35% for the fifth straight meeting. Officials took a hawkish tone and said they had debated whether to raise rates again during the meeting. Traders don’t see a cut here until now April or May of next year.

Equity markets on Tuesday will see a plethora of Federal Reserve speakers, with seven scheduled to give comments throughout the day. And economists see today’s retail sales report coming in at a 0.3% increase for May, after being flat in April.

Widespread rains yesterday continued to fall over the Northern Corn Belt, with most of Dakota’s and Minnesota picking up anywhere from 0.5″ to 2.5″ in the last 24 hours. The East and Southeast saw more scattered rains, while the remainder of the Corn Belt was mostly dry.

Models continue to fluctuate beyond a week as gulf activity is hard to pick up, but the overall high pressure ridge situation remains through the end of the week; meaning the NW Corn Belt continues to receive storms/showers.

High temps today top out in the low/mid 90’s across the East and Northeast, while a trough has brought cooler air into the Northwest. Highs in Montana and parts of North Dakota won’t reach 60 degrees today, while overnight lows dip down into the 40’s.

The global moisture outlook remains mostly unchanged, though the GFS is wetter in Northern China overnight in the 15-day period than what was offered Monday. Russian wheat areas stay mostly dry.

Of note, Mexico is set to receive some of the best rains in weeks, as models see a tropical storm system out of the Gulf bringing 3-5″ to all but the far Northern growing regions over the next 10 days.

And no updates for South America, as their forecast has become a bit stagnant. Heavy rains in Northern Argentina/Southern Brazil, with scattered showers for the remainder of Argentina and dryness for the remainder of Brazil. Temps continue to run well above average in both countries.

As a reminder, there will be no markets at the CBOT tonight/tomorrow for the Juneteenth Federal holiday. Trade will resume at 7pm central time Wednesday evening.

Have a great day.

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