Grain Comments: 06-22-2023

Good morning:

The grains are taking at least a brief break after their month plus rally, though little has developed in the weather forecasts so far this week to dissuade the bulls; the heart of the Midwest remains in need of a concrete rain event heading into the key development month of July. Notably absent from yesterday’s rally was limit-down soybean oil, extending those losses today along with the rest of the oils after disappointing biofuels numbers in the RFS announcement. The grain market will see a bit more holiday-delayed usage data for the rest of the week, but the overall trend is unlikely to change until supply-side fears are eased.

Rain was heavy but widely scattered in the WCB and Plains over the past 24 hours, as action remains far west today and tomorrow, before lightening up a bit and shifting in the central and northern belt across the weekend. Overall five-day forecasted amounts look very heavy in the far north and northwest, lighter into the heart of the belt eastward (particularly Illinois, which needs it the most). Extended maps still hold that heaviest precipitation out to the northwest, absent of a widespread precipitation system for the bulk of the belt. The temperature forecast shows a slight dip into the 6–10-day period, rebounding back above normal for the first week of July.

We are starting to see more positioning for the reports that will be released at month end, these being the quarterly stocks and revised acreage reports from the USDA. The most interest tends to fall on acreage in this data and this year is unlikely to be any different. The USDA is currently using planted acreage of 92 million on corn, 87.5 million on soybeans, and 49.9 million for wheat in its balance sheet estimates. Given the wet spring and delayed start to the planting season in some regions it was immediately suspected we would see reductions to both corn and spring wheat plantings. This was especially the case in the Upper Plains, mainly in North Dakota. Planting conditions improved considerably as spring planting progressed and it is not though we may only see minimal losses to corn and wheat acres. This also means we will likely see a minimal increase to soybean plantings. Trade may show more interest in the quarterly stocks data. On June 1st of 2022 the US had 4.35 billion bu of corn, 971 million bu of soybeans, and 666 million bu of wheat in inventory. Thoughts are we will see more corn in storage this year but less soybeans and wheat.

Have a great day!