Grain Comments: 08.24.23

Overnight trade was mixed on limited fresh news with corn 1-2 cents lower, soybeans 5-7 cents higher, and wheat on both sides of unchanged. The US dollar and energies were higher while equities were mixed.

 

Today’s Reports: Export Sales, Jobless Claims

 

  • PF IL corn yield 193.7 bpa, 190.7 last year
  • PF IA corn yield 182.5 bpa, 181.1 last year
  • PF pod counts remain high

 

Trade is expecting to see elevated sales totals in the weekly export data that will be released this morning. Several flash sales have been published in recent days and these are giving the corn and soybean markets some much needed support, especially for new crop months. Corn sales for the 2023/24 marketing year currently trail USDA estimates by 50% and are the lowest since 2019. Now that the US is competitive in the global market this is expected to correct. Even so, export sales still appear to be overestimated. Soybean bookings for the new crop marketing year are down 30% from estimates but this is a considerable improvement from just a few weeks ago. One factor that is starting to gain more interest is not just sales, but who is buying the corn and soybeans. On soybeans nearly all recent trade has been with China. Given China’s unstable economy and demand outlook, the concern is if they back away from US offers our sales will drop considerably. Our top corn buyers are Mexico and South Korea, but the same worry is being shown if they back away from the US. Wheat demand remains lethargic as well as cheap offers out of Russia are attracting most import buyers.

 

Highlights

* Stats Canada to update production Aug 29th

* Smaller Canadian crops expected

* Shrinking Chinese population impacting commodity demand

* Chinese economic growth also stalls

* Weekly ethanol production -147,000 barrels

* Weekly ethanol reserves -645,000 barrels

* Loading delays continue to Brazil ports

* Panama Canal wait times at 3 weeks

* Low water starting to impact US export outlook

* September options expire tomorrow

 

Corn

* Weekly ethanol demand 105 mbu

* Yearly ethanol use -15 mbu from est

* US crop rating +5% from last year

* Interior basis showing strength

* High variability seen in US crop

 

Soybeans

* US crush holding above $2.50/bu

* US crop rating +2% from last year

* No frost threat on US crop

* Planting set to start in Brazil

* US still needs to trim demand

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