Grain Comments: 06-29-2023

Good morning:

The grain markets are widely mixed this morning as traders adjust inter and intra-commodity spreads ahead of export sales this morning and the USDA tomorrow. A few surprises are expected in terms of export sales today (likely still weak) and acreage tomorrow (likely little changed after a solid spring), but quarterly stocks are often the wild card. Midwest forecasts continue to trend cooler and wetter into the key corn development period.

Rains were light and scattered in the corn belt over the past 24 hours and remain so this morning, save for a fairly substantial system in eastern NE; better amounts are expected to fire up in the southern half of the belt starting today and lasting through Sunday. Accumulation is expected to be heavy in NE, southern IA/northern MO, into the ECB over the next five days. Extended maps fill out precipitation chances a bit better across the entire belt, though still heaviest west and south. Temperatures are trending a bit more towards below-normal as well, particularly as the 11–15-day period arrives into the middle of July.

Once again trade will be heavily interested in today’s export sales numbers. Demand remains behind the pace needed to reach yearly expectations on corn, soybeans, and wheat, and if we do not see improvement soon, we will again see sales projections adjusted in balance sheets. This seems more likely on corn at this time, but all three contracts could see higher carryout estimates as a result. Wheat is becoming more of a concern is that unshipped sales are dropping quickly, which leaves little on the books to ship for the remainder of the marketing year. Not only is trade concerned with poor old crop demand be we are seeing more interest in the slow start to the new crop export program as well. The main reason for the slow sales is the record corn and soybean crop out of Brazil that are being offered at sizable discounts to the US. The marketing year on wheat is just getting underway but those sales remain light as well. As the session progresses, we will start to see final positioning ahead of tomorrow’s quarterly stocks and updated acreage numbers from the USDA. Average trade guesses are for 99 million bu (mbu) less corn in storage than a year ago, 162 mbu fewer soybeans, and 86 mbu less wheat. Acres are expected to be very close to the March intentions report.

Have a great day!