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Grain Comments: 08.16.23

Futures are higher this morning, with corn, soybeans, and wheat all trading in the green. Dollar index down slightly. Energies are near unchanged, and equalities are slightly higher.

 

Today’s Reports: Housing Starts, Industrial production, EIA Energy stocks, Ethanol Production, Dairy Product Sales

 

  • Macro sentiment has turned negative
  • Ag markets pricing a possible increase in production
  • Russian drone attacks grain silo on the Danube

 

Grain and oilseed markets are supported this morning after two days of strong selling on another attack by Russia on a Danube facility. The Danube has become the main artery for grain exports out of Ukraine. Continued escalation on the river that would hinder export capacity would cause major disruption to Ukraine’s flow of exports. This continues to worry the markets. Outside of the war risk, markets have been heavy this week on a string of negative macro data that added to the burdensome fundamentals that have driven the corn market lower. A deteriorating economic situation in China could potentially slow US exports. At home, the high 10-Year Treasury yield and the sharp decline in crude oil prices this week imply there remains concern over the state of the economy. These factors have been front and center for the first two trading days of the week. News of a Russian Danube facility strike is enough to support markets this morning though.

 

 

Highlights

* Reported Russian attack on Danube grain silo causing some damage

* A string of negative world and domestic macro data weighs on the market

* Crude oil retreating from recent highs

* British inflation fell to 6.8% – in-line with analyst expectations

* Russian ruble weak prompting sudden meeting for Russian Central bank

* Exchange rate briefly touched 102 ruble to dollar

* US ratings agency Fitch warns it may downgrade the credit of many US banks

 

Corn

* Corn crop ratings weighing on prices

* Market views potential for yield increase

* Dec23 corn moves into new lows for the move, trading below $4.80

 

Soybeans

* Soybean crop ratings improve sharply

* Fundamentals remain supportive

* SX23 has support around $13

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