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Grain Comments: 07.31.23

Negative Chinese economic data and improved weather outlooks weighed on overnight trade with corn 10-12 cents lower, soybeans down 20-25 cents, and wheat 15-20 cents lower. The US dollar and equities were firm while energies were mixed.

Today’s Reports: Crop Progress, Export Loadings, Chicago PMI

  • Crop ratings expected to decline 1-2% this week
  • Russian purchases now need to be paid in rubles
  • Crude oil at 3-month highs

One of the main points of interest in today’s session will be month end positioning. The only August contract that goes into delivery is soybeans and nearly all contracts have already been rolled forward. To see elevated positioning would still not be a surprise as managed money traders tend to take profits regardless of deliveries. While this will be a factor, trade will be anticipating the crop progress report this afternoon. Last week the US corn crop was rated 57% Good to Excellent and 54% of the soybean crop was rated the same. Recent heat is thought to have weighed on the crops, especially where rainfall has been limited. Even with these declines in ratings the US corn crop is rated 87% fair or better. The soybean crop is still 86% fair or better. While crop ratings are still being closely monitored, corn harvest is starting to take place in the deep south. Not enough harvest has taken place to give an accurate crop estimate but that will change in a few weeks. The addition of these bushels will apply more pressure to an already soft interior basis. These bushels will also help fill gulf reserves as low water levels continue to hamper US river movement.

Highlights

* Trade expects lower crop ratings tonight

* Managed money commodity interest is declining

* Importers starting to build food reserves

* World 2023 food inflation est 5.8%

* Food inflation down from previous estimate

* Active US hurricane season expected

* Brazil ports pushed to capacity

* Port of Parana volume a 50 year high

* NATO to monitor Black Sea with drones

* Shipping disruptions impact Russian economy

Corn

* Dec corn was 6 cents lower last week

* YTD corn values -22.4%

* Complex trying to uncover export interest

* Corn more favorable than feed wheat

* Most carryout est remain above last year

Soybeans

* Nov soybeans -19 ¼ cents last week

* YTD soybean values -1%

* Last week’s export sales totaled 61 mbu

* Safras predicts 171.5 mmt 23/24 Brazil crop

* Brazil basis values firming

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