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Grain Comments: 06-27-2024

Good morning.

Mixed in light volume has been the theme of the overnight trade to start Thursday, as traders and fund managers continue to prepare for tomorrow’s data. Position squaring looks to again be the main feature in row crop markets today, while financial traders will see a slew of data points that will likely have an impact on equity markets. Beyond Friday, weather returns to the forefront in terms of importance to price discovery, with long term direction determined primarily by the size of the US harvest. Corn futures are unchanged to start this morning, soybean futures are up 2-4 cents, and the Chicago wheat market is up 4-5 cents. Both old and new crop corn futures have made new lows again overnight. Products are mixed, soybean meal is down $1/ton, and soybean oil is up 40 points. Outside markets also mixed, crude oil is trading 40-50 cents/bbl higher, the Dow Jones index is down 90 points, and the US$ index is down 15 points.

The trade sees corn planted acres coming in at 90.35 mil for tomorrow morning’s quarterly stocks and acreage update from the USDA. Soybean acres are seen at 86.75 mil, while all wheat acres are seen at 47.66 mil. All three figures would be higher than the March estimates if realized.

Corn stocks as of June 1 are seen at 4.873 bil bu’s, which would be up 18.8% from last year’s 4.103 bil bu reading. Soybean stocks are estimated at 962 mil bu’s, up 20.9% from last year’s 796 mil bu’s. And wheat stocks are seen at 684 mil bu’s, up 20% from last year’s 570 mil bu’s.

This morning’s weekly export sales report for the week ending June 20th is expected to show corn sales in a range of 400k-1.1 mil mt’s, and soybean sales in a range of 300k-600k mt’s on the old crop side.

According to data from Ukraine’s ag ministry, total grain exports are up 3.9% from last year at 50.3 mmt’s. This total includes 29 mmt’s of corn (up 0.8%), 18.3 mmt’s of wheat (up 10%), and 2.48 mmt’s of barley (down 7.7%).

Canola processing in Canada was up 19.5% in the month of May from same month last year at 920k tons according to data released by Statistics Canada on Wednesday. Oil production was up nearly 22% y/y at 394k tons, while meal production was up 15.9% from last year at 534k tons.

Same group is also set to release their latest planted area figures for Canada at the 7:30 am central time this morning. The trade is expecting wheat acres at 27.2 mil, compared with an estimated 27.0 in March, and is expecting canola acres at 21.5 mil, up from 21.4 estimated in March.

Argentina’s central bank BCRA will not renew a notice that imposes a minimum financing rate that producers can access when they hold a soybean stock of more than 5% of their total output. The regulation, enacted in 2022, is set to expire on June 30th.

According to Politico, the USDA is set to launch a new tranche of federal funding this week to help farmers with the economic toll of the bird flu outbreak. Sources say new guidance will pay farmers for roughly a month of milk losses from cows that were removed from production over a 134-day period, but will not reimburse farmers for animal deaths.

Soybean crushing in Mato Grosso, Brazil hit a new record for any month in May with 1.16 mmt’s of beans being processed. This was up 2.7% from April, and up nearly 20% from May of last year according to data from IMEA (Mato Grosso Institute of Ag Economics).

Aside from all the economic data due over the next two days, markets will also see tonight’s Presidential Debate between the two oldest individuals ever to seek the office of US President, Donald Trump and Joe Biden.

Of note, this is the first debate in history between a sitting and former president, and is also being run by CNN, instead of the nonpartisan commission that controlled the debates for over 30 years.

24-hour rainfall maps show the Midwest had a drier bias yesterday than earlier in the week, and more of the same is expected for today. Scattered showers were seen yesterday in generally the South and Southeast, with totals ranging from 0.1″-1″. Some locally heavier amounts were seen.

The GFS continues to be the wetter of the two models into next week, but both trended drier in the short-term overnight. Scattered storms impact mostly Northern areas of the Corn Belt tomorrow into the weekend, with totals of 0.1″-1.5″ expected.

A cold front has brought cooler air to most of the Midwest today, with highs in the upper 70’s to mid 80’s. Temps look to stay average to below average through the middle of next week, before temps again warm to above average.

Models continue to show rains for China’s northern growing regions into next week, which is good. No update for Russian wheat areas, with scattered showers still seen in the South and temps running average to slightly above.

South America continues to trend drier in areas in/around Paraguay, which is welcome. Mostly dry elsewhere in Brazil and Argentina. No update on the temp side, as Brazil continues to be slightly above average and Argentina continues to be slightly below average through the next week.

Have a great day.

 

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