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Grain Comments: 07-05-2024

Good morning.

No overnight markets last night, with the ag trade set to open up for the day at 8:30am central time this morning. Calls are mixed/lower following better than expected rains for the Corn Belt over the last 24 hours, and Friday’s volume likely will remain on the lower end as some traders take a 4-day holiday weekend. What traders are in attendance for the day will be the delayed weekly export sales report this morning, while the weekly commitment of trader’s report is delayed till next week. Outside markets are mixed/quiet to start Friday, crude oil futures are down 5-10 cents/bbl, the Dow Jones index is down 15 points, and the US$ index is down 40 points.

This morning’s weekly export sales report for the week ending June 27th is expected to show old crop corn sales in a range of 500k-900k mt’s, and old crop soybean sales in a range of 200k-600k mt’s. The report is a day delayed due to yesterday’s holiday.

New crop corn sales are estimated between 0-400k mt’s, new crop soybean sales between 50k-150k mt’s, and new crop wheat sales between 350k-700k mt’s.

The weekly drought monitor update, released Wednesday due to yesterday’s holiday, showed a mixed bag on drought on conditions for the last week. Improvement was noted across the Southwest and Plains states, while the Corn Belt saw scattered improvement across the Northern half, while the Southeast saw widespread degradation.

As a nation, 6% of the corn production area is experiencing D1 drought conditions, up from 3% last week; 7% of the national soybean area is experiencing D1 drought, which is up from 2% last week. The amount of area in the abnormally dry category went up 4% and 7% for the two crops respectively.

The USDA’s Foreign Ag Service estimated 2024/25 Chinese corn imports at 20 mmt’s, down 3 mmt’s from the current USDA forecast. The group cited abundant production and an increase in the availability of imported substitutes as reasons for the cut.

Private gain consultancy SovEcon raised their estimate of the Russian wheat crop to 84.1 mmt’s, up from their previous estimate of 80.7 mmt’s. The group says timely rain in the central region and Volga Valley helped the crop to recover from earlier damage caused by drought and frosts.

Brazilian ag consultancy ANEC, in a weekly report, estimated soybean exports out of the country in July to reach 9.5 mmt’s, down from June’s 13.9 mmt’s. The same group sees July corn exports at 3.4 mmt’s, up from June’s 1.0 mmt’s. Corn exports typically pick up this time of year as the second crop is harvested.

The weekly update from the Buenos Aires Grain Exchange for Argentina showed soybean harvest has been completed, while corn harvest advanced 8% on the week to 62.9% complete. No updates were made to production estimates for either crop. Winter wheat planting was seen at 85.3% complete, up from 81% last week.

According to the United Nations’ Food and Agriculture Organization’s index of food commodity prices, global food prices were steady in the month of June. Increases in prices for veg oils, sugar, and dairy prices were offset by cheaper grain prices.

The S&P500 and the NASDAQ have again made new record highs but are flat this morning ahead of today’s key job market data. The report is expected to show a step-down in hiring in June, while unemployment is expected to hold steady at 4%.

The last 24 hours saw better than expected rains in the East and Southeast than what were expected going home on Wednesday. The southern halves of MO/IL/IN picked up fairly widespread 0.5-2″, as several rounds of scattered storms impacted the area.

The N/NW also continues to see unwanted rains, with an additional 0.5-1.5″ falling in the Eastern half of the Dakotas and into Southern MN/WI. The Ohio Valley into the East Coast also picked up scattered precipitation of trace to 1.5″.

Seven-day forecasts trended drier over the holiday for the Northern Corn Belt but are in better agreement on moisture coming from Beryl in the Gulf. Both the EU and the GFS see Beryl’s tail bringing heavy as rains as far North as S IL/MO. Key will be whether these rains can make their way further North into key growing areas.

Week-two forecasts continue to see a wetter pattern in the South and East, while drier than normal conditions are seen for the North/Northwest. Aside from Northwestern flooding, there continues to generally be minimal threats to crop production over the next 10 days.

Temps throughout the heart of the country will be average to below average for most of the next week, while the West stays hot. Keep in mind, this is mid-July, and average temps are around 90 degrees F for most of the Midwest this time of year. Night-time lows routinely stay in the 60’s for the majority of the Corn Belt.

Have a great day.

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