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Grain Comments: 06-20-2024

Good morning.

Grain markets are lower to start Thursday following a one-day pause for the Juneteenth holiday. Not a lot has changed in the past 24 hours, as global weather patterns remain the same as earlier in the week. The USDA update on planted acreage a week from tomorrow will be the next big market maker for corn and soybeans, as this will be the number traders and analysts use in their production calculations through Summer. Otherwise, it continues to be Mother Nature that determines board price direction. Corn futures are trading 4-5 cents lower, soybean futures are trading 6-7 cents lower, and the Chicago wheat market is down 6-8 cents. Products are mixed, soybean meal is down $2-3/ton, and soybean oil is up 10-20 points. Outside markets are mostly higher, crude oil futures are up 5-10 cents/bbl, the Dow Jones index is up 10 points, and the US$ index is up 25 points.

Due to the holiday, the EIA weekly ethanol production and stocks report will be released at 10am central time this morning, while the weekly export sales report will be released at its normal time tomorrow morning.

According to China’s General Administration of Customs, soybean imports from the US hit 1.27 mmt’s, up 156% from May of 2023. This is still far less than the 8.8 mmt’s imported from Brazil, but at least shows pace is improving.

For the first 5 months of the calendar year, Brazil has chipped China 24.71 mmt’s (up 23% from same period in 2023), and the US has shipped China 10.85 mmt’s (down 34% from 2023).

Also out of China, their sow herd is seen at 39.96 mil head at the end of May, down 6.2% from the same date last year. Data at the end of April showed the herd at 39.86 mil head.

Ukraine’s ag ministry on Wednesday estimated grain exports out of the country at 49.3 mmt’s so far this year, compared with 47.5 mmt’s as of the same date last year. Ukraine’s marketing year ends on June 30th.

The June cattle on feed report, due tomorrow, is expected to show a June 1 on feed number of 11.489 mil head, which would be down 0.9% from last year. Placements are seen 1.3% lower at 1.936 mil head, and marketings are seen 0.2% higher at 1.956 mil head.

In a weekly report, the Buenos Aires Grain Exchange raised their estimate of wheat planted area in Argentina by 100,000 hectares and estimated 65.5% of the crop had been planted.

Same group estimates Argentine soybean harvest at 98.3% complete and estimates corn harvest at 49.3% complete. Production estimates for both crops were again left unchanged at 50.5 mmt’s and 46.5 mmt’s respectively.

Futures in the NASDAQ and the S&P have made new all-time highs again early this morning, as Thursday looks to be relatively quiet on the data front. Weekly jobless data doesn’t look to be anything out of the ordinary, and otherwise there are just a handful of corporate earnings reports, and only two Fed officials scheduled to speak.

Rainfall yesterday was seen in a band across the Plains, as areas of TX/OK, KS, MO, and IA saw scattered showers. Biggest totals were 2-3″. The Northern Corn Belt is seen picking up additional moisture through the end of the week, while the Eastern half of the Midwest will remain mostly dry.

Models are in general agreement with both week-one and week-two forecasts, which raises confidence in the solutions. Both the GFS and the EU are wet for the Midsection of the Midwest next week, which will need monitoring.

Temps will be their “coolest” of the week today, though will still be above average east of the Mississippi. Warm air then again blankets the majority of the country by early next week and remains through the end of the week. Highs reach at least the mid/upper 90’s from CA all the way to the Carolina’s.

Models trended wetter in the 10-day period for Russian wheat areas, but confidence remains low. Temps here continue to run above average. For China, the North continues to be hot, but monsoon rains in the South are seen working further North than was seen a couple days ago.

Argentina trended wetter over the past 48 hours, but the South American forecast is also mostly unchanged. Southern Brazil/Uruguay receive unwanted heavy rains over the next week, while the rest of Brazil remains dry. Temps continue to run above average in Brazil, while Argentina is seen cooling off by the end of next week.

Have a great day!

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