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Grain Comments: 08.29.23

Better than expected crop ratings weighed on overnight trade with corn 1-2 cents lower, soybeans down 6-8 cents, and wheat off 3-5 cents. The US dollar was firm, energies were mixed, and equities were lower.

 

Today’s Reports: Consumer Confidence, Stats Canada

 

  • Hurricane strength storm moving in US Gulf
  • Thursday is FND on Sep contracts
  • Crop rating declines less than expected

 

The condition of the US crops slipped lower last week, but not as far as trade was expecting. The US corn crop is now rated 56% Good/Excellent, down 2 points from last week. The crop is also rated 17% Poor/Very Poor. An estimated 9% of the US corn crop is mature which is 1% ahead of average. The US soybean crop rated G/E declined 1 point to come in at 58% G/E. The volume of the crop rated P/VP remains low at 14%. Leaves have dropped off 5% of the soybean crop, 1% less than normal. The spring wheat rating declined 1% on the G/E range to 37% G/E. A large portion of the spring wheat crop is rated P/VP at 24%. While weather played a major part in these rating declines, seasonal maturity was also a factor. The question in the market now is if we will see any improvement following a return to more normal temperatures across the United States or if a lack of rainfall will cause ratings to decline even more in the weeks ahead. These numbers will soon start to have less impact on price discovery as attention will start falling on actual harvest data by mid-September.

 

Highlights

* Markets prepare for additional rate hikes

* Next Fed meeting Sep 19th and 20th

* US quarterly stocks report Sep 29th

* US mortgage rates highest since 2001

* Global consumers reduce spending

* Brazil may shift to Chinese Yuan for trade

* Brazil and others want to limit currency volatility

* US crop ratings expected to keep declining

* Ratings normally decline with maturity

* World feed grain demand overestimated

 

Corn

* Brazil projects 36% increase to exports

* Brazil cheaper for Sep offers

* US cheaper for Oct forward

* SAM production expected to increase 1.6%

* Russia corn crop est 14.8 mmt

 

Soybeans

* Concerns build over soy crop finish

* Analysts predict high aborted pods

* Argentine inflation limits soybean trade

* Devalued currency makes it hard for Argentina to buy

* Brazil crush pace expected to slow

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