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Grain Comments: 07.27.23

Selling pressure subsided overnight with corn mixed, soybeans up 3-5 cents, and wheat up 2-4 cents. The US dollar was lower while energies and equities were higher.

Today’s Reports: Export Sales, Jobless Claims

  • Flooding reported in parts of China
  • Export market starting to compete with interior bids
  • Lack of insurance impacting Russian exports

Trade will be closely watching today’s export sales numbers for verification of rumored sales to China from last week. Several bookings have been reported but only a few daily sales were posted on soybeans and those were for the 2023/24 marketing year. US export sales remain below the projected level from the USDA with just five weeks left in the marketing year. We are starting to see a shift in importer attitude that is affecting all US exports. Importers have shifted back to only extending their coverage by small amounts rather than covering large chucks of projected usage. One reason for this is price as commodity values have risen in recent weeks making it costly to buy several vessels at once. The increase in global interest rates and rebound in the US dollar are also limiting what an importer can buy at one time. Another reason for the change in importer attitude is that commodity supplies are becoming more perpetual. This is from the larger crops out of South America and expectations that production will increase even more. This eases the need to buy large amounts at certain times of the year. This change in attitude has been more of an issue for the US and will continue to shrink our share of the global market.

 

Highlights

* Economists feel recession threat is over

* US commodities highest priced globally

* Ethanol values +10-20 cents/gal past week

* Ethanol average $2.30 to $2.50/gal

* DDG values firming on stronger soy meal

* Weekly ethanol production +168,000 barrels

* Weekly ethanol stocks +122,000 barrels

* Weekly ethanol production highest in 21 weeks

* US beef cow herd smallest in 52 years

* Smaller herd to trim feed demand

Corn

* Domestic corn demand rising

* Weekly ethanol use 109 mbu

* Projected ethanol use +20 mbu from USDA estimate

* Ukraine world market share to drop from 15% to 9.5%

* SAM harvest slowed from logistics

Soybeans

* US acreage questioned

* Several analysts believe plantings too low

* Double cropping reports rising

* IGC predicts record world crop

* US crush margin highest since April

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