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Grain Comments: 08.21.23

The addition of risk premium supported overnight trade with corn 3-5 cents higher and soybeans up 20-25 cents. Wheat was pressured by news of a potential insurance offering for Black Sea shippers causing futures to trade 2-3 cents lower.

 

Today’s Reports: Crop Progress, Export Inspections

 

  • Chinese bankers lower interest rates to spur economy
  • Rating opinions mixed, 2% higher to 2% lower
  • Pro Farmer crop tour this week

 

Several of the factors that have driven commodity values in recent weeks will again be factors in this week’s trade as well. US weather is improving on a whole and was reflected in last week’s crop ratings and drought maps. Additional improvement is expected to the ratings this week, but we may not see the jump we did a week ago. Trade is showing more interest in yield data as harvest moves forward. Better than expected numbers continue to surface and the question now is if enough of these higher reports will be seen to negate losses in other areas. More analysts are raising their total crop estimates on the improved numbers. Several crop tours have taken place in recent weeks and the long-awaited Pro Farmer tour will get underway this week. Final numbers will be released at the end of the week. Historically Pro Farmer tends to underestimate final yields in their tour. We are finally starting to see new crop demand surface and narrow the gap between actual sales and USDA projections, mainly on soybeans. While this is positive, until we meet and exceed yearly demand estimates market response may be muted.

 

Highlights

* China to provide more economic relief

* Low Chinese demand impacting all commodities

* US dairy prices a 5-year low

* Whole milk values lowest since 2016

* Brazil to produce soy molasses ethanol

* US weather outlooks mostly favorable

* Average US diesel price $3.75/gal

* Diesel costs up for 6 straight weeks

* US diesel fuel reserve a 31-day supply

* Domestic stocks to use tighter than global supplies

 

Corn

* Dec corn +5 ¾ cents last week

* US/Mexico GMO debate building

* 23/24 exports -24% from last year

* Exports projected to increase 26%

* US equal to Brazil Sep through Nov

 

Soybeans

* Nov soybeans +45 ¾ cents last week

* China booking spring needs from Argentina

* US 23/24 sales -38% on the year

* Sales -30% from estimates

* US average crush margin $3.60/bu

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