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Grain Comments: 08.18.23

Pre-weekend short covering supported overnight trade with corn 2-4 cents higher, soybeans up 12-15 cents, and wheat up 10-12 cents. The US dollar was steady, energies were mixed, and equities were lower.

 

Today’s Reports: Cattle on Feed

 

  • Drones hit Moscow business district overnight
  • New crop demand starting to surface
  • Pro Farmer crop tour next week

 

While the decline in commodity values has not been welcomed by US farmers, it has been beneficial for the US export market. The decline in commodity prices is again making the US competitive in global trade, especially on soybeans. This has brought more buyers to the US to cover import needs, mainly China. While this has been positive, trade is already looking at how long we may see the buying continue. China’s economy is very questionable at this time and generating ideas consumer demand will further slow. This has been verified by economic indicators in the market turning to a deflationary position which means limited demand even with lower costs. This fear has started to temper market potential, including concerns that if prices rally this new demand will be quick to dry up. Weather is also weighing on commodity futures right now as even with heat in US forecasts, limited impact on US crops is foreseen. Recent rainfall and models indicating temperatures will only remain high for a few days further reducing market worries. Trade is more interested in US yield reports that continue to indicate higher production that the USDA just forecast in the August WASDE. The Pro Farmer crop tour will take place next week and data will be heavily monitored.

 

Highlights

* Global economy impacting commodity demand

* Argentina remains dry ahead of planting

* Australia starting to turn dry

* US is competitive in global market

* Ukraine is loading vessels in Odesa

* Drought improves in the US

* Higher crop ratings expected next Monday

* Tight soy oil reserve may limit biodiesel expansion

* Higher US yields reported

* More end users report adequate old crop coverage

 

Corn

* Weekly export sales 9.2 mbu 22/23, 27.5 mbu 23/24

* Cumulative new crop sales -24% from last year

* Corn in drought -7% at 42%

* High input costs may limit Argentine plantings

* Argentine 23/24 crop est -2 mmt from USDA

 

Soybeans

* Weekly sales 3.4 mbu 22/23, 51.7 mbu 23/24

* Cumulative sales -38% from last year

* Soy in drought -5% at 38%

* Argentina to expand acreage for 1st time in 10 years

* US soy oil stocks at a 10-month low

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