Grain Comments: 07-06-2023

Good morning:

Overnight grain volumes have slowed post-report and post-holiday with corn and soybeans having made their respective moves; neither crop is clearly “out of the woods” even though the forecasts have shifted cool-er and wetter. Precipitation results are generally coming up more scattered than expected, particularly in the northern corn belt which could use rain.

24-hour rainfall totals were light in the ECB but strong in the southern Plains, where action remains this morning; precipitation chances look solid through the southern Plains and belt through the weekend. Cool and wet conditions linger into the 6-10 days, with precipitation forecasts a bit more mixed for the 11-15 days.

Trade has now taken the June stocks and acreage data and formatted their own market outlooks. It is not surprising that these results are widely varied. If we take the harvested US corn acreage estimate of 86.3 million acres and the June yield estimate of 181.5 bushels per acre it shows us a carryout of 2.6 billion bu using projected demand. The argument is being made that corn yield is well below the USDA forecast, but by how much is highly debated. At the present time it is believed the US corn yield will be closer to 176 bushels per acre. While this would lower our ending stocks, demand is more than likely overestimated at the present time, both for old and new crops. It is not out of the question we could see corn yield lowered and still see a higher carryout given current market dynamics. This has prevented corn from posting sizable advances in recent sessions. The same figures are taking place in the soy complex and most models are showing a decline in ending stocks, even if demand is trimmed. The June acreage data and USDA yield estimate would give us a minimal new crop carryout of 140 million bu. Demand is likely too high on soybeans as well, but there is no room for yield loss at all. There is less concern over wheat balance sheets as larger global production is overshadowing any concerns on US balance sheets.

Have a great day!