July 28, 2023
Grain prices – particularly corn and wheat – benefitted greatly in recent sessions from ongoing geopolitical tensions in the Black Sea and scorching weather in the U.S. Midwest. But with cooler (and in some cases, wetter) weather likely next week, traders took another opportunity to lock in profits and engage in some technical selling on Friday. Corn prices fell another 2%, with August soybean contracts down almost 3%. Wheat losses were variable, mostly ranging between 0.25% and 1.25%.
Some wet weather is likely across much of the central U.S. heading into this weekend through early next week. A few areas will even gather another 0.75” or more between Saturday and Tuesday, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s mid-range 8-to-14-day outlook predicts some above-normal precipitation for parts of the Northern and Central Plains between August 4 and August 10, with cooler-than-normal conditions likely for a big portion of the Midwest and Plains during this time.=
On Wall St., the Dow shifted 169 points higher in afternoon trading to 35,451 on cooling inflation, and is on pace to finish its third consecutive week of moving higher. Energy futures were also in the green, with crude oil up around 0.5% this afternoon to stay above $80 per barrel. Diesel climbed nearly 1.5% higher, while gasoline firmed by 0.5%. The U.S. Dollar softened slightly.
On Thursday, commodity funds were net sellers of all major grain contracts, including corn (-10,000), soybeans (-13,500), soymeal (-2,500), soyoil (-3,500) and CBOT wheat (-7,000).
Corn prices struggled again on Friday, closing the session more than 2% lower after another round of technical selling. September and December futures each lost 11.25 cents to close at $5.22 and $5.31, respectively.
Corn basis bids were steady to weak across the central U.S. on Friday after falling 2 to 15 cents lower across four Midwestern locations.
In the latest edition of Feedback from the Field, Farm Futures grain analyst Jacqueline Holland reports that several respondents “report woeful subsoil moisture levels that could limit the resources the crop requires at this point in the growing season to ensure full kernel development across the entire cob.” Curious about what other farmers are seeing across the Corn Belt? Click here for a roundup of multiple regions.
South Korea purchased 2.7 million bushels of animal feed corn, likely sourced from South America or South Africa, in an international tender that closed earlier today. The grain is for arrival in early December.
Preliminary volume estimates were for 277,429 contracts, moving modestly above Thursday’s final count of 257,851.
Soybean prices followed other grains lower on Friday as traders largely ignored three more flash sales announced this morning. August futures tumbled 44.75 cents to $14.8725, with September futures down 20.5 cents to $14.33.
The rest of the soy complex also tracked lower today. Soymeal futures dropped 1.25% to 1.75%, while soyoil futures were down as much as 0.7%.
Soybean basis bids were steady to mixed after moving as much as 10 cents higher at an Illinois processor and as much as 20 cents lower at an Ohio river terminal on Friday.
Private exporters announced three large soybeans sales to USDA on Friday. The first was for 11.9 million bushels to China, the second was for 6.3 million bushels to Mexico, and the third was for 15.2 million bushels to unknown destinations. All of the sales are for delivery during the 2023/24 marketing year, which begins September 1.
Just how big is Brazil’s 2022/23 soybean crop? Brazil’s Conab, USDA and several consultancies have all offered various estimates throughout the season, but the consensus is it will reach a record level of around 5.6 or even 5.7 billion bushels. Matthew Kruse, president of Commstock Investments, digs deeper into the numbers in today’s Ag Marketing IQ blog – click here to learn more.
Preliminary volume estimates were for 195,797 contracts, trending slightly lower than Thursday’s final count of 218,448.
Wheat prices suffered a mild to moderate setback on Friday after another round of technical selling. The focus remains on the Black Sea region after a recent wave of Russian strikes on Ukrainian ports and other critical infrastructures. September Chicago SRW futures fell 8.75 cents to $7.04, September Kansas City HRW futures dropped 8.75 cents to $8.5775, and September MGEX spring wheat futures eased 2.5 cents to $9.0175.
Ukrainian officials levied fresh accusations of Russian attacks on civilian targets in the Black Sea, saying it amounts to “the methods of terrorists.” “The aggressor's warships continue to behave brazenly and audaciously in the waters of the Black Sea, violating all the norms of international maritime law,” according to a statement from senior official Andriy Yermak. Russia declined to extend a deal that allowed safe passage of shipping vessels in the Black Sea, which expired on July 17, and has issued strikes on multiple Ukrainian ports and grain storage facilities since then.
Meantime, Russia’s wheat production potential is on the rise, according to the country’s Sovecon consultancy, which slightly raised its estimates to 3.200 billion bushels. Russia is the world’s No. 1 wheat exporter.
French farm office FranceAgriMer trimmed its quality ratings once again for the country’s current soft wheat crop, from 80% in good-to-excellent condition in the prior week down to 78% through July 24. This season’s harvest has reached 83% completion over the same period, versus 59% a week ago. France is Europe’s top grain producer.
And finally, if it’s been awhile since you’ve been to FarmFutures.com, our Friday feature “7 ag stories you can’t miss” is a great way to quickly catch up on the industry’s top headlines. The latest edition includes an update on interest rate trends, a Senate amendment that prohibits the purchase of farmland by certain companies, and more. Click here to get started.
Preliminary volume estimates were for 131,958 CBOT contracts, shifting slightly higher than Thursday’s final count of 127,590.
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