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Grain Comments: 07.09.24

Good morning. Markets have been mostly quiet in the overnight session following Monday’s sharp sell-off to new lows. New crop soybeans have again made new lows on the charts this morning, while everything else has held just above yesterday’s lows for the time being. The combination of improving crop conditions on the weekly report and better-than-expected rainfall for the Midwest out of Hurricane Beryl has few in the trade wanting to jump in on the long side of the market. Corn futures this morning are 1-2 cents lower, soybean futures are mixed, up 3 cents to down 3 cents, and the Chicago wheat market is 2-3 cents higher. Products are lower, soybean meal is down $1/ton, and soybean oil is down 90-100 points. Outside markets are mixed, crude oil is down 30-40 cents/bbl, the Dow Jones index is up 20 points, and the US$ index is up 10 points. Both NASDAQ and S&P500 futures made new highs again overnight.

 

Today’s Reports: API Energy Stocks

 

  • Like yesterday, Tuesday’s slate of deliveries is again rather light this morning; just 35 contracts of wheat, and 1,049 contracts of soybean oil.

 

  • Monday afternoon’s weekly crop progress update as of Sunday, July 7th showed that 68% of the corn crop was rated g/ex, up 1% from last week. Soybeans were also seen 68% g/ex, up 1% on the week as well. The trade had expected no change.

 

  • At the state level, the biggest improvements on the week in corn conditions were seen in Ohio and Kansas with an 8% improvement, while Kentucky and Iowa each improved by 3%. Biggest falls were in Pennsylvania (-6%) and North Carolina (-5%). Of note, N Carolina was at 81% g/ex on June 2nd, compared to just 12% as of yesterday.

 

  • The states with the biggest improvements in soybean conditions were Ohio (+10%), Kansas (+5%), and Iowa (+4%). WI and KY were both up 3%, while IL and IN were both up 2%. Biggest declines on the week were in Tennessee and North Dakota (both down 6%), while South Dakota and North Carolina were down 5%. Mississippi was down 4%.

 

  • Other data out of the report included corn silking gaining 13% on the week to 24%, while corn in the dough stage reached 3% in its initial reading. Soybeans blooming increased 14% to 34%, while beans setting pods increased 6% to 9%.

 

  • For wheat, winter wheat harvest was seen 63% complete, up from 54% last week; and spring wheat conditions came in at 75% g/ex, up from 72% last week. The trade had expected no change in spring wheat conditions.

 

  • Also out yesterday afternoon was the CoT report, which was pushed to this week due to last week’s holiday. For the week ending July 2nd, managed money traders sold 58,872 contracts of corn, sold 11,263 contracts of soybeans, and sold 3,488 contracts of Chicago wheat.

 

  • This makes managed money traders now net-short 336,538 contracts of corn, net-short 140,926 contracts of soybeans, and net-short 73,974 contracts of Chicago wheat. The all-time record short position in corn, made earlier this year, is 340,732 contracts.

 

  • In soy products, fund traders were buyers of 46,629 contracts of soybean oil in the week, and sellers of 13,908 contracts of soybean meal. This makes them net-short 61,854 contracts of bean oil, and net-long 73,459 contracts of bean meal.

 

  • According to Brazilian consultancy firm AgRural, 2nd crop corn harvest in Brazil has reached 63% complete as of July 4th, compared with 49% last week, and 26% in the same week last year. Separate firm Safras y Mercado sees sales of the crop at 34%, compared with 34.1% last year and the five-year average of 43.1%.

 

  • Ukraine’s grain association said Tuesday that corn exports reached 29.3 mmt’s in the 2023/24 marketing year that ended in June. Combined grain and oilseed exports reached 57.5 mmt’s in the season, similar to last year.

 

  • Financial traders will be tuned in to Fed Reserve Chair Jerome Powell today and tomorrow, as he’s set to testify to the Senate Banking Committee on the Fed’s outlook for interest rates and inflation. Treasury yields were little changed this morning.

 

  • Other broader market happenings on Tuesday include a NATO Summit in Washington DC, where President Joe Biden is set to host leaders from Europe; the meeting’s highlights include Ukraine aid, Britain’s new leader Keir Starmer, and Japan’s new pledge to cement NATO ties.

 

  • Much of Houston remained without power Tuesday morning following the arrival of Hurricane Beryl. Authorities say the black out could last days, while extreme heat again builds into the area.

 

  • The majority of Monday’s moisture around the country came from the storm, with areas of Eastern TX picking up 1-4″, with locally heavier amounts. Rains stretched through Arkansas and into Southern MO. Scattered showers were also seen along a cold front in the North, with WI/MI picking up 0.1-1″ of precip.

 

  • Otherwise, the forecast remains mostly unchanged from yesterday. Beryl makes its way North into IL/IN today into tomorrow, with mostly dry conditions expected for the Corn Belt there after. Models continue to be in good agreement on the next 5 days’ forecast.

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