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Grain Comments: 08.04.23

Ukraine attacks on Russian ports and pre-weekend short covering supported overnight trade with corn up 10-12 cents, soybeans up 12-15 cents, and wheat up 15-20 cents. The US dollar was steady, equities were firm, and energies were mixed.

 

Today’s Reports: Unemployment Data

 

  • Low water impacting US barge movement
  • US corn/soybeans in drought -2% last week
  • Improved crop conditions expected Monday

 

Trade has been volatile this week with rounds of both buying and selling from the managed money crowd. This has kept futures in a choppy pattern, but the overall trend of the markets are mixed. The grains are currently showing more of a downtrend while soybeans are more sideways. This is being reflected in how much technical trading we are seeing during the day. Weather remains one of the primary drivers of the market and conditions this week improved greatly from what took place the week before. As a result, most analysts feel the condition of the US corn and soybean crops will be relatively unchanged in next Monday’s report. Even so, this will remain one of the lowest rated crops of both corn and soybeans in recent history. Weather has also caused losses to spring wheat with most crop scouts trimming production by 20 to 25 million bu. Demand has started to increase for soybeans in the global market which is giving that commodity more support than the grains. The balance sheets on soybeans are much tighter than on the grains which is also favoring the complex. We will get the August supply and demand data next Friday and positioning is starting to ramp up in the market ahead of it. The main focal point of today’s trade will likely again fall on the Black Sea as Ukraine is now attacking Russian export terminals. The most interest is what Russia will do to retaliate.

 

Highlights

* US farmers show more optimism in Ag economy

* El Nino odds holding at 70%

* El Nino forecast elevating South American plantings

* Strong US dollar hampering export interest

* US dollar higher 12 of last 15 sessions

* US crop ratings lowest since 2012

* Crop scouts still see better yield potential

* US mortgage applications declining

* 30-year mortgage rates rising

* August WASDE next Friday the 11th

 

Corn

* Weekly sales 4.2 mbu old crop, 13.7 mbu new crop

* 2023/24 sales -34% from last year at 205.3 mbu

* Brazil corn cheaper than US through November

* Wide range of estimates on US crop

* Yield estimates range from 170 to 180 bpa

 

Soybeans

* Weekly sales were 3.3 mbu old crop, 96.7 mbu new crop

* 2023/24 sales -47% from last year at 297.2 mbu

* Brazil soy and product values firming

* China to auction 460,000 mt today

* Several reports of China buying US soybeans

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