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Grain Comments: 07.17.23

News Russia will not extend the current Black Sea corridor agreement supported overnight trade with corn 6-8 cents higher, soybeans up 12-15 cents, and wheat up 15-20 cents. The US dollar, energies, and equities were all under pressure.

 

 

Today’s Reports: Export Inspections, Crop Progress, NOPA Crush

 

  • Black Sea Corridor agreement terminated
  • China reportedly an active buyer
  • Crop ratings expected to improve 2-3 points tonight

 

 

While the US production season and crop estimates remain key factors in the market, trade is also focusing attention on the global grain crops. The United Nations’ is predicting a 2023/24 world grain crop of 2.82 billion metric tons, up 1.1% from 2022/23. Much of this is the result of large wheat crops in several production regions, mainly Russia and South America as countries recover from the La Nina event that trimmed global grain yields. The Safrinha harvest in Brazil is also coming in larger than expected this year. Initially it was thought the Safrinha crop may be limited by the delays to the start of the soybean harvest in Brazil. Progress was quickly made up and Safrinha plantings were not delayed as much as expected. When combined with near perfect growing conditions the crop is now expected to total 132 million metric tons, well above last year’s crop. We are now seeing exports of this crop with July shipments expected to be record large at 6 million metric tons. This is putting more pressure on the US in the global market for corn sales, and also limiting market reaction to the crop loss the US has seen from drought. Elevated usage of feed wheat has also tempered concern over a potentially smaller US corn crop.

 

Highlights

* El Nino strength forecast scaled back

* US soil moisture remains low, adequate

* Record 23/24 world grain inventory expected

* 23/24 world grain crop est 2.82 bmt

* World food costs continue to slide lower

* Economists say 90% chance of rate hike next week

* Some economists see 2 more hikes this year

* South American basis values firm

* US still higher-priced than most sources

* Black Sea corridor agreement ends today

 

Corn

* US new crop sales just 50% of last year

* Chinese corn values soften

* SAM harvest pressure building

* Brazil July exports est 6.7 mmt

* July 2022 Brazil exports were 5.6 mmt

 

Soybeans

* Chinese imports from Brazil +42% in June

* Malaysia Palm Oil supply 4 month high

* Brazil July exports est 9.4 mmt

* July 2022 Brazil exports were 7 mmt

* NOPA June crush est 170.5 mbu

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