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Grain Comments: 08.23.23

A lack of fresh news limited overnight trade with corn steady to +1, soybeans 8-10 lower, and wheat steady. The US dollar and equities were higher while energies were under pressure.

 

Today’s Reports: Weekly Ethanol Data, Cold Storage

 

  • PF NE corn yield 167.2 bpa, +8.7 from last year
  • PF IN corn yield 180.9 bpa, +3 from last year
  • PF pod counts mostly higher than last year

 

Trade is heavily vested in the data that is being collected from the Pro Farmer crop tour. For the most part US yield potential is better than last year and above what trade seems to have been expecting. Corn yields are projected to be as much as 39 bushels above last year in some areas of the tour’s path. While this will likely change as we see the group move into areas of higher stress, trade is already looking at collected data and trying to determine if these high corn yielding fields will make up for losses in other regions. We are also collecting yield data from areas where harvest is taking place that confirm higher fringe area corn production. These are starting to be factored into balance sheet outlooks and adding bushels to the current USDA crop estimate. The general thought is we may see a higher US production figure in the September balance sheets. While the Pro Farmer tour does not predict soybean yield, it is finding higher pod counts which tend to lead to a larger crop. As with corn these are likely to change as the tour moves into regions of elevated crop stress.

 

Highlights

* Strong US dollar impacting exports

* Strong dollar elevates foreign selling

* More ships expected to enter Black Sea

* US crop ratings expected to keep declining

* El Nino slow to build

* Rains not returning to SAM

* China lowers 1 year loan rate to 3.45%

* Chinese loan rates record low

* Farmer focus is on upcoming harvest

* Fresh market news is sparse

 

Corn

* Brazil harvest pressure starting to lift

* Brazil farmers increase sales

* US/Mexico GMO dispute continues

* Mexico still buying US corn

* Funds short position largest in 3 months

 

Soybeans

* US stocks/use continues to offer support

* Crop ratings expected to decline

* Chinese demand for US soybeans -63% in July

* Chinese imports from Brazil +32%

* Fund long smallest in 2 months

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