Grain Comments: 07-10-2023

Good morning:

Soybeans ratcheted lower off post-USDA highs last week but are regaining some ground this morning; the trade expects overall ending soybean stocks to be slashed nearly in half on Wednesday when the government integrates its surprise planted acreage estimate into the ‘23/24 S&D table.

Rain was light for the majority of the Midwest over the weekend; better amounts are to be seen this work week. 6–10-day forecasts are pushing rains out further south with the 11-15 day drier overall as well. Temperatures remain below-normal into the 6-10 days, starting to trend normal-to-above by the 11–15-day period.

Futures are higher on some disappointing rains over the weekend and a return to warm weather this week in portions of the corn belt. The export inspections data this morning will likely highlight once again the demand problem that has developed in the US corn and soybean market. While the trade focuses on weather and a possible cut to yields in the Wednesday report, looming in the background is the fact that the demand engine just cannot seem to get started. Brazil corn remains an attractive option for world buyers as we move along the safrinha corn harvest. Fund positioning has turned negative for corn according to Commitment of Traders data released Friday. Funds sit net short -18,209 lots as of July 3rd. Funds remain net long soybeans at 89,142 lots. The acreage decline shock in the June 30 USDA report supports the net long for soybeans as any drop in yield will greatly impact the supply of US soybeans.

Have a great day!