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Grain Comments: 07.10.24

 

Good morning. Ag futures, and commodity futures in general, have had a mostly quiet start to Wednesday, as the overnight trade has produced small ranges in most every market. Corn and soybean traders are awaiting tomorrow’s Conab update for July, as well as the USDA’s monthly update on Friday, before taking a larger position on either side. This likely continues to produce choppy trade into the weekend, though a lack of weather threats and continued fund selling has undoubtedly turned momentum lower. Corn futures this morning are trading 1-2 cents lower, soybean futures are a penny lower, and the Chicago wheat market is down 3-4 cents. Products are mostly higher, soybean meal is up $1/ton, and soybean oil is up 10 points. Outside markets are mixed, crude oil futures are down 20-30 cents/bbl, the Dow Jones index is unchanged, and the US$ index is also unchanged. NASDAQ and S&P500 futures are slightly higher, but have not made new highs today as of this writing.

 

Today’s Reports: EIA Weekly Ethanol Production/Energy Stocks

 

  • July deliveries for Wednesday included 121 contracts of corn, 10 contracts of wheat, and 27 contracts of soybean oil.

 

  • This morning’s weekly ethanol production report for the week ending July 5th is expected to show production in a range of 1.043-1.069 mil bbls, and is expected to show stocks in a range of 23.00-23.719 mil bbls. Both figures would be similar to last week.

 

  • According to the European Commission, the EU’s soft wheat exports in the season that ended June 30th totaled 31 mmt’s, compared to 31.6 mmt’s in the year prior. Barely exports were down 12% at 5.88 mmt’s, and corn exports were down 27% at 19.4 mmt’s.

 

  • The Commission does mention that data for France is incomplete since the beginning of 2024, and data for Bulgaria and Ireland is incomplete for the entire 2023/24 season. This has been the same ongoing issue with EU export data that has been going on for months.

 

  • In Russia, grain exports in the 2023/24 season totaled 89.3 mmt’s, which is up nearly 21% from the previous season. The figure is based on phytosanitary certificates issued. Barley exports were up 67%, while corn exports were up 31%.

 

  • Also out of Russia, the country became the top exporter of peas to China in the 2023/24 season, overtaking Canada in less than two years with market access. Russia accounted for a 49.1% market share last season, with Canada accounting for 44.6%. In previous years, Canada’s market share had been near 95%.

 

  • According to the Malaysian Palm Oil board, stocks of the oil totaled 1.829 mil tons in June, which is up 4.4% from last month. Production was estimated at 1.615 mil tons, while exports were seen at 1.205 mil tons.

 

  • Jerome Powell, on day 2 of his testimony, is set to speak to the House Financial Services Committee later today. Yesterday, the Fed Reserve Chairman said that the Fed is wary of potential labor market risks, though it continues to seek more evidence of slowing inflation.

 

  • Data showed Taiwan exported nearly $3.5 bil worth of computer chips and related equipment in June, a 422% increase from the same month last year. Total shipments to the US were up more than 74% for the month. The country is home to TSMC, the world’s most advanced chipmaker, and the main supplier to companies such as Nvidia and Apple.

 

  • Not a lot of news came out of day one of NATO’s summit in Washington DC this week; US President Biden pledged to forcefully defend Ukraine against Russia, as he and other leaders are poised to announce a new aid package for the war-ravaged country.

 

  • China’s consumer price index rose for a fifth straight month in June data showed, but was below trade expectations; the index was up 0.2% from the year prior, compared to a 0.3% increase in May, and expectations for a 0.4% increase.

 

  • Good rains were witnessed throughout the Ohio River Valley and broader Eastern Corn Belt on Tuesday; satellite data shows 24-hour totals of 0.75-3″ for areas of MO, IL, IN, OH, and MI. Eastern IL/Western IN saw some places with upwards of 5-6″. Scattered showers were also noted across the Southeast, while the rest of the country was mostly dry.

 

  • The Northeast will see additional moisture today from the remnants of Beryl, with the storm looking to exit the East Coast by Wednesday evening. Otherwise, the rest of the country looks to be mostly dry into next week with just the Northern half of the Midwest seeing scattered shower potential.

 

  • Models continue to be in good agreement in the short-term, while differences remain beyond the next week; the CPC and the EU models are in agreement on a wetter South/dryer North pattern for week two, while the GFS model is drier in the South, and sees moisture more in the East and Ohio Valley.

 

  • Temps begin to again increase in the East starting tomorrow, with most of the country then set for an above average weekend. High’s look to reach back into the 90’s as far north as southern MN/SD, while night-time lows look to again not dip below 70 for most of the Corn Belt starting this weekend.

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