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Grain Comments: 08.31.23

Sparse fresh news and limited market interest weighed on overnight trade with corn 1-2 cents lower, soybeans down 2-3 cents, and wheat 5-7 cents lower. The US dollar and energies were higher while equities were mixed.

 

 

Today’s Reports: Export Sales, PMI, Jobless Claims

 

  • 30% of US crops still under stress
  • US harvest gaining momentum
  • Hot, dry start to September forecast

 

 

As always, today’s export sales data will be heavily monitored by trade. We have started to see demand perk up on both corn and soybeans in recent weeks with several daily sales announced for each commodity. We have also started to see more demand for soy products as Argentina remains absent from the global supply line. There are reports Argentina is starting to develop another peso incentive program for soybean sales which may elevate soybean flow and in turn product availability. Cumulative US export sales remain sluggish on old crop, but market focus is now on new crop. Export sales in these time slots have been low all year but are finally starting to show some life. Year to date export sales for the 2023/24 marketing year trail last year by 44% on corn, 38% on soybeans, and 14% for wheat. Even with demand perking up, trade will be slow to take futures much higher until we cover these deficits. The rebound we have seen in commodity values and ongoing strength in the US dollar are limiting overall demand. Month end positioning will be notable in today’s session as well as early positioning for the upcoming extended holiday weekend.

 

Highlights

* Markets is preparing for US harvest

* Country basis is weakening

* Russian grain exports +27% in August

* Ukraine August rail exports +50%

* Turkey still working on corridor resumption

* Weekly ethanol manufacturing -287,000 bbl

* Weekly ethanol inventory -1.18 million bbl

* Australia/China resume trade

* US export basis firming, lowering demand

* Global commodity trade is slowing

 

Corn

* YTD corn futures -29.7%

* Brazil 23/24 crop est 133 mmt

* 23/24 Brazil crop steady from 22/23

* 1st Brazil corn crop 8% planted

* US harvest advancing, pressure building

 

Soybeans

* YTD soybean values -8.5%

* 23/24 Brazil crop est 163 mmt

* 22/23 Brazil crop was 156 mmt

* China crush margins again positive

* Chinese meal demand questioned

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