Corn led what there was of mediocre overnight trade volume, but put in a minuscule trading range and held near lows; soybeans remain resilient in the face of a declining complex, with the bulls noting daily flash sales to China and “unknown” yesterday and hoping for more going forward.
U.S. precip continues to hold far north and southeast, reaching up into the bulk of the Midwest tomorrow, still light in the Plains; extended maps look wetter going forward. Temps are warm into the 6-10, cool again for the 11-15.
Argentina will see light showers today through the weekend but condition remain dry there overall, though temps finally cool next week; Brazil again saw rains NE yesterday and widespread action is on tap over the next ten days.
Trade is already starting to look forward to next year’s US production and carryout possibilities. Nearly all analysts are predicting larger production in the 2023 production season and beyond. A few of these are well above current USDA outlooks, with some expecting to see ending stocks on corn more than triple by the end of the 2024 marketing year to 4 billion bu. While this is possible, it is too early to start pricing such a carryout into the market. The same is happening in the soy complex with predictions for ending stocks to reach 400 million bu by the same time. This figure is not nearly as bearish as the corn figure would be if accurate. Once of the greatest determining factors in US carryout, other than US crop size, is how much pressure we see from others in global trade. Brazilian crops are forecast to be much larger this year and if weather starts to improve, Argentine production will likely rise as well. This means more competition for the US in the export market which is already being seen this year. While this news is not necessarily fresh, the reality of the US seeing a decline in global trade is becoming more bearish for price discovery.
Have a great day!