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Grain Comments: 08.09.23

Pre-report consolidation gave us mixed overnight trade with corn on both sides of unchanged, soybeans 6-8 cents higher, and wheat 10-12 cents lower. The US dollar was steady while energies and equities were higher.

 

Today’s Reports: Weekly Ethanol Data

 

  • Black Sea fighting impacts Russian exports
  • Chinese economics data remains negative
  • End user pricing surfaces on breaks

 

Weather conditions across the United States are starting to have less of an impact on daily price discovery. Many areas of the US have received rains recently and more are now reporting they have adequate soil moisture to finish out their crops. This does not mean weather will not impact price discovery, but that market reaction to forecasts will have less of an impact. This has caused risk premium to be removed from the market and is a source of recent price pressure. Improved weather outlooks and conditions have also started to cause changes in yield estimates. In July the USDA estimated the US corn yield at 177.5 bushels an acre and soybeans at 52 bushels. Trade immediately disagreed with these numbers, but in the past few sessions many have started to show more agreement with what the USDA is predicting. The average yield projections going into Friday’s WASDE report are 175.5 bushels on corn and 51.5 bushels on soybeans. Since this data was collected crop conditions have improved and yield projections have increased. To see unchanged yields on Friday is unlikely, but not out of the question. A reduction to demand is also expected in balance sheet updates, and even if yield is trimmed, we could still see larger stocks to use with losses in usage, and this is what is more important in market valuations.

 

Highlights

* World container freight rates +11.8% past week

* Container freight jump highest since 2021

* So American logistics remain congested

* Current market favors buyers over sellers

* Rains benefit US river levels

* US still seeing draft restrictions

* Drought more of an issue in Canada

* China continues to build global trade relations

* Global production forecasts rising

* Economists predict another rate hike in Sep

 

 

Corn

* Brazil 23/24 crop now est 139 mmt

* Private Brazil crop est 10 mmt over USDA

* Weather favoring SAM harvest

* Brazil corn values continue to soften

* Ukraine exports larger than expected

 

Soybeans

* Privates estimate Brazil crop at 166 mmt

* Privates 3 mmt over USDA

* Malaysia raises palm oil export forecast

* US June meal exports largest since 1990

* China only source of US new crop demand

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