Grain Comments: 06.21.23

Corn was 15-20 cents higher overnight as were soybeans and wheat in response to the lower crops ratings and ongoing weather concerns. The US dollar and energies were steady while the equities were weak.

 

Today’s Reports: API Energy stocks, EPA Blend Decision

 

  • EPA RVO decision to favor biodiesel over ethanol
  • IL corn crop 36% G/E
  • IL soy crop 33% G/E

 

As expected, the ratings of the US corn and soybean crops deteriorated last week. The US corn crop is now rated 55% Good/Excellent, down 6% from last week. The corn crop Poor/Very Poor rating increased from 8% last week to 12% this week. The soybean crop rating declined 5 points on the week and is now at 54% G/E. The P/VP rating on soybeans is also at 12%, an increase of 3% from a week ago. Given current US weather maps these ratings will likely decline again next week. As a result, many analysts are starting to reduce their yield and crop size expectations. The US spring wheat ratings also decreased on the week by 9 points and now stands at 51% G/E. The winter wheat crop rating held steady at 38% G/E and harvest advanced to 20%. We have seen a considerable volume of short covering in the market this past week which has given us the bulk of our support. This has moved all three major contracts into technical uptrends and extended our gains. The question now is if these positions will be held going into the month end reports of if we will see some profit-taking liquidation instead.

 

Highlights

* EPA to raise biofuel blend rates, hold ethanol steady

* Analysts see slow build to Chinese demand

* Investor attitude weighs on all markets

* Dry weather trimming EU crops

* UN shows more concern over global food security

* Argentine port volumes lowest in over two decades

* Futures rally will further hinder US sales

* June 30th report positioning increases

* July options expire Friday

* July FND is next Friday

 

Corn

* Analysts trim US yield estimate

* More talk of 178 bpa yield

* Also seeing reductions to US acres

* Demand estimates also decrease

* Brazil export flow picking up

 

Soybeans

* Soy yield starting to be questioned

* August weather more critical for soybeans

* Brazil basis continues to weaken

* US imports weigh on EU meal values

* Biofuel blend to favor biodiesel

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