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Grain Comments: 07.25.23

Reports that Ukraine is loading vessels at Danube terminals weighed on overnight trade with corn 10-15 cents lower, soybeans 15-20 cents lower, and wheat down 10-15 cents. The US dollar and equities were higher while energies were mixed.

Today’s Reports: Consumer Confidence, Fed Reserve Meeting

  • EU Ag Ministers to meet on Ukraine exports
  • Russia accused of “feed terrorism”
  • Heavy country movement reported

The rating of the US corn crop held steady last week which was in line with trade guesses. The has the crop at 57% Good/Excellent and 13% Poor/Very Poor. The corn crop is also 68% in the silk stage and 16% of it is at the dough stage, both ahead of the five-year average. The rating of the US soybean crop slipped 2 points on the week to stand at 54% G/E. Soybeans are also rated 14% P/VP. Pods have set on 35% of the US crop, 4% above average. Heat and dry conditions impacted the spring wheat crop as the crop rating declined 2% to come in at 49% G/E. Winter wheat harvest has picked up wit 68% of the crop now out, just shy of the 77% that is average for this date. While these numbers will be a factor in today’s trade the real interest will likely fall back on developments in the Black Sea. Russia continues to attack Ukraine infrastructure and not just damage ports but grain handling facilities and transportation routes. The concern now is Ukraine will start launching counter attacks and destroy Russian infrastructure as well, further crippling the region. Trade is now trying to determine how much of this lost export business from the Black Sea may be satisfied with US inventory.

Highlights

* El Nino to favor late season US crops

* Models indicate favorable August conditions

* Global rains have increased

* Large SAM crop forecasts weigh on US demand

* SAM economics favor soybeans over corn

* Higher values to encourage all SAM plantings

* US interior basis remains soft

* Managed money generating higher volatility

* Rebound in US dollar stresses exports

* World food security a growing concern

Corn

* Russia predicts smaller crop

* Russian export forecast above USDA

* US 23/24 export commitments total 178 mbu

* 23/24 SAM production +20 mmt this year

* Argentine incentive program to favor corn

Soybeans

* Argentine crop est -4 mmt from USDA

* New crop US sales total 181 mbu

* US 23/24 sales lowest since 2019

* SAM production for 23/24 +30 mmt from this year

* US crush margins a 5-month high

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