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Grain Comments: 07.24.23

The bulk of today’s session will be spent gathering weekend weather data and its impact on crop production. Higher temperatures are being forecast for the US for the next two weeks and the concern is this will further stress crops. There have been rains reported with these warmer temperatures though which is buffering its impact. Trade is still expecting to see a slight decrease in crop ratings tonight as conditions were less favorable last week. We are seeing more disagreement in the market over how much recent weather has impacted yields. Current US corn yield estimates range from 173 bushels per acre to a high of 181 bushels. Most analysts are projecting a corn yield close to the latest USDA estimate of 177.5 bushels per acre. Soybean yield has also been trimmed with yield estimates from 50 to 52 bushels an acre. While this range is very tight, an average yield at the low end of the range would put the US in a rationing position. The question with this is how much demand has already been cut given the rally in futures over the past week. Trade is also starting to look more at the 2023/24 South American production estimates that are considerably larger than this year. The market is becoming aware it doesn’t need a huge crop out of the US this year, but rather one that is big enough to bridge the gap between South American harvests.  



* Rail chassis shortage noted in US 

* Rail shortage impacting container movement of grains

* Fed meeting starts tomorrow

* Economists predict another 25-basis point rate hike

* This likely the last rate increase of the year

* Russia placing more mines in Black Sea

* Ukraine may export through Romania

* US to provide Ukraine with another $2.3 billion in aid

* Rains forecast for driest areas of China 

* Month end positioning to increase this week



* Dec futures +22 ½ cents last week

* US corn offers 40-60 cents above Brazil

* Market rally cuts processing margins

* 2022/23 exports 96% of estimate

* Brazil production estimates rising


* Nov futures +31 ¼ cents last week

* Weather trims Canadian canola estimates

* US values up to 80 cents above Brazil 

* US new crop sales 62% below last year  

* Poor/Very Poor crop rating above 10-year average 

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