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Grain Comments: 06-21-2024

Good morning.

Markets are higher at the CBOT to kick off the last day of the week, as shorts likely bank profits from the week heading into the weekend. The quarterly stocks/acreage report just one week from today will be the next market maker in the row crop markets, with traders otherwise focused on weather between now and then. Midwest heat bears monitoring in areas that do not have sufficient moisture. The two-week forecast needs to be verified. Corn futures are trading 2-3 cents higher, soybean futures are trading 4-9 cents higher, and the Chicago wheat market is up 3-5 cents. Products are mixed, soybean meal is up $3-4/ton, and soybean oil is down 30-40 points. Outside markets also mixed, crude oil futures are down 5-10 cents/bbl, the Dow Jones index is down 10 points, and the US$ index is up 20 points.

This morning’s weekly export sales report for the week ending June 13 is expected to show corn sales between 700k-1.2 mil mt’s, and soybean sales between 375k-850k mt’s. The marketing year for what ended on May 31.

New crop sales are again expected to be minimal, with the trade expecting 0-200k mt’s for both corn and soybeans in the week. Trade also sees 200k-500k mt’s of new crop wheat sales.

Russian Ag Minister Oksana Lut says adjusted duties on Russian grain exports will be in effect from July 1 on. The proposed adjustment would increase the base price for calculation of export duties on wheat, barley, and corn by RUB$1,000.

According to the EPA (Environmental Protection Agency), the US generated about 1.27 bil ethanol (D6) blending credits in May, up from roughly 1.20 bil in April. Biodiesel (D4) blending credits were seen at about 661 mil in May, down from 804 mil in April.

The USDA’s monthly livestock slaughter report showed total red meat production in the US was up 0.6% in the month of May from last year. Beef production at 2.33 bil lbs. was up 0.9% from the same month last year, while pork production was at 2.28 bil lbs. was up 0.3% from last year.

Cattle slaughter in May totaled 2.75 mil head, down 3.3% from last year, while hog slaughter for the month was unchanged from last year at 10.583 mil head.

Barge shipments down the Mississippi River in the week ending June 15 were up 44.8% from last week at 530k tons; corn shipments were up 6.1% at 260k tons, and soybean shipments were up 81.5% at 216k tons.

The EU has reimposed customs duties on Ukrainian oats due to exceeded quotas. The emergency brake triggered when import volumes exceeded the annual average between 2021 and 2023, which for oats was 2,440 tons. The duties are in effect from June 19, 2024, to June 5, 2025.

Stock index futures are quiet to start Friday, ahead of the so-called ‘triple witching hour’ expiration day. It is estimated some $5.5 trillion worth of options tied to index’s, stocks, and ETF’s will go off the board today according to options platform SpotGamma.

Canada is considering potential new tariffs on Chinese EV imports, in a move that would be similar to those of the US and the EU recently. The government still has to make final decisions, but officials say an announcement is likely coming soon.

Rainfall/thunderstorms continue to impact a corridor through NE/SD into MN and WI. Northern NE/Southern SD received generally 1-3″ on Thursday, with local areas receiving some 4-7″ according to satellite data.

Models continue to see additional rainfall for these areas through the weekend, while the remainder of the US will be mostly dry into the middle of next week. The Atlantic NE and SE will also pick up scattered moisture.

Week two forecasts continue to trend wetter for all of the GFS, the EU, and the CPC models. The wettest areas are in the Northern Plains/Northern Corn Belt, but moisture is seen stretching as far South as KS/MO, and further South in the West.

Temps continue to run hot in the East, while cool air through the mid-section of the US exits by Sunday; highs for a wide majority of the country again stretch into the upper 90’s/lower 100’s by next Monday/Tuesday, before moderating at week’s end.

Not a lot of international weather update going into the weekend; tropical storm Alberto has made its way inland in Mexico, bringing additional rain to the North/Northeast. Northern China continues to be dry, along with Russian wheat areas and the Black Sea.

South America continues to see above average temps for most of Brazil and Argentina, with models trending warmer in the South than yesterday’s runs. Heavy rains continue to impact Southern Brazil/Uruguay, while Argentina receives normal rains. Brazil is dry.

Have a great day

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