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Grain Comments: 07.28.23

Favorable weather forecasts and a lack of buying enthusiasm weighed on overnight trade with corn 6-8 cents lower, soybeans down 8-10 cents, and wheat down 10-12 cents. The Us dollar and energies were weaker while the equities were firm.

 

Today’s Reports: Personal Income Data

  • Crop ratings expected to decline 1-2 points Monday
  • US new crop export demand lowest since 2019
  • Russia has hit 26 Ukraine ports in last 9 days

 

One of the primary stories in the market this week has been the escalation in fighting between Ukraine and Russia following the ending of the Black Sea corridor. Russia wasted no time in attacking Ukraine ports when this ended, basically shutting Ukraine off from vessel loading. Ukraine turned to the Danube River for exports, but Russia was soon hitting these terminals as well. This did not last long though, and loading was able to resume. The EU met with Ukraine and agreed to allow for more of their resources to be used for exports, and even agreed to help with added costs. This took the attitude in the grain markets from bullish to neutral to slightly bearish by the end of the week. The other primary story was weather and the extreme heat that settled in across the US. Precipitation was included with this heat to temper market reaction. Trade is still mostly in agreement that crop ratings will still decline next week on corn, soybeans, and spring wheat. Forecasters are still optimistic that weather will turn more favorable in August and any crop damage may be minimal as a result.

 

Highlights

* Ukraine farmers facing bankruptcy

* Economists predict “soft landing” for US economy

* US renewable fuel demand is rising

* US interior basis values continue to see pressure

* Global selling increases on latest rally

* Strong US dollar encourages foreign sales as well

* US to limit foreign land ownership

* China, Russia top lists of land concerns

* Russia hints at possible reopening of Black Sea corridor

* Ukraine asks EU to open more export lanes

 

Corn

* Weekly export sales up 33% from previous week

* US crop rating expected to decline

* US crop 59% in drought, +4% last week

* Peak drought was 70% in June

* Importers focused on Brazil supplies

Soybeans

* Weekly export sales 3x previous week

* April renewable diesel production a record 201 mil gal

* Traditional biodiesel totaled 133 mil gal

* Traditional production -7 mil gal from March

* US soy in drought +3% at 53%

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