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Grain Comments: 07.08.24

 

Good morning. Ag markets are sharply lower at the CBOT to start Monday morning as the remnants from hurricane Beryl look to make their way further North than was expected at the end of last week; this will bring good moisture to a lot of the Eastern Corn Belt during the key pollination period for corn, which has pressured markets in the overnight hours to start this week. Otherwise, the trade will see an update on crop progress, as well as the current managed money position after the markets close this afternoon, which will look to drive price direction into mid-week. Corn futures this morning are trading 6-7 cents lower, soybean futures are trading 12-18 cents lower, and the Chicago wheat market is down 8-11 cents. Products are lower, soybean meal is down $4-5/ton, and soybean oil is down 40-50 points. Outside markets are mixed, crude oil futures are down 70-90 cents/bbl, the Dow Jones index is up 50 points, and the US$ index is up 10 points.

 

Today’s Reports: US Weekly Export Inspections; CFTC Commitment of Traders; Weekly Crop Progress

 

  • Light slate of deliveries for Monday, with just 23 contracts of soybean oil and 31 contracts of wheat.

 

  • Not a lot of breaking new news coming out of the weekend in the ag markets. Main stories for this week will be whether soybean oil can continue its impressive run-up, and then what data we get from the USDA on Friday.

 

  • The USDA ag attach√© in China sees soybean production in the country coming in at 19.6 mmt’s in the 2024/25 season, on 9.95 mil ha’s of planted area. The group made no change to their import estimate, keeping it at 103 mmt’s in the 2024/25 season.

 

  • US federally inspected beef production in the week ending July 6th was down 15.4% from the previous week at 436 mil lbs. Pork production was similarly down 16% at 438 mil lbs. For the year, beef production is down 1.6%, and pork production is up 1.2%.

 

  • Beijing news reported last week that a long term investigation found many of SinoGrain’s general-purpose tankers haul both edible liquids and chemical liquids, and are not cleaned between loads, which possibly contaminates shipments of edible oils with toxic chemicals.

 

  • SinoGrain has instructed its subsidiaries to conduct inspections since July 2nd to make sure transportation complies with with food safety regulations.

 

  • As of July 1, 58% of the French soft wheat crop was rated in the g/ex category, down 2% from the previous week and compared to 81% last year. Harvest has reached 1% complete vs 8% in same week last year. Private groups see French yields down some 13% from last year.

 

  • Fed Chair Jerome Powell is again set to give his thoughts on the current financial situation this week, as he’s scheduled to speak to Congress Tuesday and Wednesday. Most assume his comments will continue to echo that policymakers need more confirmation of easing inflation before rates are lowered.

 

  • Hurricane Beryl made landfall in Texas over the weekend as a category 1 hurricane. Weather models see its remnants bringing rainfall to the Midwest by mid-week, and then exiting the Northeast by the weekend.

 

  • The EU model sees the chance for 1-3″ of precip from Arkansas through S MO/IL and into IN and N OH between now and Friday night. Eastern Texas sees a more general 2-5″, with locally heavier amounts possible.

 

  • Most of the mid-section of country saw some kind of precip over the weekend, with trace showers to up to 3″ of rainfall seen for areas of the Dakota’s/MN all the way down through the plains and into TX. Heaviest amounts were seen in W KS/OK, and also along the SE coast in the Carolina’s.

 

  • Beryl will be the main weather feature for the Corn Belt this week, while the Southeast and East coast are also expected to stay on the wet side. Models are not in good agreement on week-two forecasts, with the EU continuing to be wet in the S/SE, and the GFS being wetter in the North and central part of the country.

 

  • Midwest temps will be average to slightly below average to begin this week, before Western heat expands East by week’s end, raising Midwest high’s back into the 90’s. The West Coast remains hot over the next week. Night-time lows look to work back into the 70’s by the start of next week in the Corn Belt, which will need monitoring.

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