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Grain Comments: 06-28-2024

Good morning.

Ag markets are mostly higher to start the last day of the week, as the trade anxiously awaits the 11am central time data drop from the USDA. Price direction next week will likely be determined by today’s numbers, while any change in the weather forecast over the next 48 hours will also be closely watched for. Funds continue to be heavily short on the ag space for this time of year, so we will see if any data comes out today causing them to worry about that position. Corn futures are trading either side of unchanged, soybean futures are trading 3-4 cents higher, and the Chicago wheat market is up 3-4 cents also. Products are mixed, soybean meal is down $1/ton, and soybean oil is up 5-10 points. Outside markets are mostly higher, crude oil futures are up 30-40 cents/bbl, the Dow Jones index is up 30 points, and the US$ index is unchanged.

The first day of deliveries for the July contract showed 744 corn contracts out for delivery, 1,129 contracts of wheat, and 1,137 contracts of soybean oil. No soybean or soybean meal deliveries.

Argentine oilseed crushers union SOEA has started another strike to protest a proposed labor reform that is awaiting a vote in the lower house of congress currently. The group earlier this month postponed the strike at the request of the government.

Of note, President Javier Milei’s omnibus reform package was approved by Argentina’s congress in a final vote late Thursday night; Also approved in congress was a return of income taxes, which will give the government much needed room to reach fiscal targets. How this affects the previously mentioned strikes is unknown at this point.

The Indian government has announced a series of measures to allow imports of key ag commodities under tariff-rate quotas, aiming to curb rising food inflation. The decision was publicly announced on Wednesday.

The Buenos Aires Grain Exchange, in a weekly update, again made no changes to their estimates of corn and soybean production in Argentina. The group sees soybean harvest mostly finished at 99.7%, while corn harvest was estimated to be 54.9% complete, up from 49.3% last week.

Planting of the winter wheat crop was estimated to be 81% complete, up from 65.5% last week. The exchange sees wheat planted area at 6.3 mil hectares.

The USDA’s hogs and pigs report, released on Thursday, showed the US hog herd totaled 74.486 mil head on June 1; this was up 0.2% from the March estimate, and up 1.3% from June 1, 2023.

Sows retained for breeding totaled 6.008 mil head, down 3.2% from last year. And the pig crop was estimated at 34.021 mil, up 1.8% from last year’s 33.148 mil reading.

Barge shipments down the Mississippi River in the week ending June 22nd were down 20.9% from last week at 419k tons. Corn shipments were down 0.4% at 259k tons, and soybean shipments were down 55.6% at 96k tons.

The IGC (International Grains Council) increased its estimate of the 2024/25 global corn production to 1.223 bil mt’s, up 3 mmt’s from its previous estimate. Same group trimmed wheat production by 2 mmt’s to 793 mmt’s. Both figures remain slightly above the USDA.

Economists see this morning’s annualized PCE reading coming in at 2.6%, down from last month’s 2.8% reading but still above the Fed’s inflation target of 2%. This would be the lowest reading since March of 2021 if realized.

The US$ saw a small uptick in values in overnight trading based on ideas that former President Trump ‘won’ last night’s first Presidential debate; Both Biden and the afore mentioned Trump spent most of the time hurling volleys of insults at each other ranging anywhere from their age to their golf handicaps, but did little to answer most of the questions asked.

The Northwestern Corn Belt saw showers yesterday of 0.1″-1.25″, with a few locally heavier totals according to satellite data. Most of the rains were focused on the Dakota’s and Minnesota, with Northern Iowa also receiving good moisture.

Temps were more seasonal in the North and look to stay that way into the first part of next week. The South again starts warming up Monday/Tuesday next week, as the high-pressure ridge amplifies. Highs in the Corn Belt look to reach back into the upper 80’s/lower 90’s by the end of next week.

Otherwise, the general forecast remains mostly the same as previous runs. The EU and GFS are in decent agreement on rainfall for the Midwest over the next week, with up to 4″ seen for areas of NE/MO/IA/MN/WI.

The EU and the CPC are wetter for the South and Southwest in the week-two period, while the GFS is wetter for the Northern Plains and Northern Midwest. Confidence beyond a week remains low.

Have a great day.

 

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