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Grain Comments: 09.01.23

Pre-weekend short covering generated higher overnight trade with corn 2-4 cents higher, soybeans up 12-14 cents, and wheat gaining 4-6 cents. The US dollar was steady while energies and equities were higher.

 

 

Today’s Reports: Grain Crushings, Fats and Oils, Unemployment

 

  • Mato Grasso to begin soybean planting today
  • Weekly soybean sales at 35 mbu
  • Markets closed Monday for Labor Day

 

 

Today’s trade volume may be elevated from normal as we have a long holiday weekend ahead of us. Markets will be closed for trade next Monday for the Labor Day Holiday. As a result, more positioning will take place today. The month of September tends to bring seasonal changes to the commodity market. For one it marks the start of a new marketing year. This means trade will be focused on 2023/24 balance sheets from now until May when the initial 2024/25 data is released. The upcoming supply and demand report will be released on the 12th and incorporate more field collected data in balance sheet outlooks. Following this will be the release of the quarterly stocks data on September 29th. This will in effect confirm our old crop carryout numbers. Harvest will increase as we move into September giving trade more data to process. We also start to see elevated exports as new crop inventory becomes available. Outside of the US we start seeing more interest in South American weather as the planting season on soybeans gets underway. Corn planting has already been taking place in Brazil on the smaller first crop. Rains are forecast to develop in South America in the near future, and without them we may see risk premium added back into futures.

 

Highlights

* Weather forecasts favorable for harvest

* Chinese banks cut interest rates overnight

* US travel above pre-Covid levels

* Ukraine exports slowing

* Logistics elevate US barge freight rates

* US becoming uncompetitive in global market

* Brazil exports remain well above last year

* Global fertilizer demand picking up

* El Nino slow to build, hard to predict

* Brazil acreage expansion doubted

 

Corn

* Weekly export sales 22/23 2.8 mbu, 39 mbu 23/24

* Unshipped 22/23 sales at 64.7 mbu

* EU production +10 mmt on the year

* EU yearly imports -39%

* Deep roots have benefited crop

 

Soybeans

* 22/23 export sales -1.9 mbu, 41.3 mbu for 23/24

* US weekly reported sales at 35 mbu

* Unshipped 22/23 sales at 58.1 mbu

* US crush margins remain strong

* EU imports +10% this year from last

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