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Grain Comments: 08.07.23

Better than expected weekend rains weighed on overnight trade while elevated fighting in the Black Sea provided support. Corn was 1-2 cents lower and soybeans were down 20-25 cents while wheat was 10-12 cents higher. The US dollar and equities are higher while energies are mixed.

 

Today’s Reports: Crop Condition, Export Inspections

 

  • Corn/soy ratings expected to improve 2-3%
  • Ukraine attacks more Russian targets over weekend
  • August WASDE this Friday

 

Several factors will combine to drive this week’s trade. The most notable will be positioning for the August WASDE report that will be released on Friday morning. The general consensus is the USDA will trim yields in this release, especially on corn. Private yield estimates vary widely from a low of 170 bushels per acre to a high of 180 bushels. In July the yield was estimated at 177.5 bushels an acre. Soybean yield is projected to be trimmed 1 bu for a 51 bushel per acre average. Trade is also expecting to see changes to demand on old crop and possibly new crop as well. It is not out of the question any alteration to demand will negate yield adjustments. Ahead of this trade will be focused on weather and crop reports. Conditions have turned much more favorable for crop development recently and this has stated to cause some analysts to add to production estimates. We are also seeing more interest on the Southern US corn harvest. While this has been slow to progress, soon we will start to see more yield data. Developments in the Black Sea will remain a driver of the market as well.

 

Highlights

* Southern US harvest advancing

* Strong dollar impacting global trade

* Global commodity rally narrows price spreads

* Economists predict more interest rate hikes

* Odds of September hike at 70%

* US labor market remains tight

* Fed set on 2% inflation goal

* US yield potential creeping higher

* Brazil to plant 29 mil more soy acres than US

* August WASDE This Friday

 

Corn

* Dec futures finished last week -33 cents

* EU 23/24 crop est 60 mmt

* EU crop -3.4 mmt from USDA

* Argentina 23/24 exports est 40 mmt

* Argentina export forecast +6 mmt from total 22/23 crop

 

Soybeans

* Nov soybeans finished last week -50 ¼

* Analysts raise US yield to 51 bpa

* Brazil 23/24 production estimates keep rising

* Most Brazil estimates higher than USDA

* New crop demand perking up, all to China

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