July 28, 2023
Grain prices struggled again on Wednesday to find much forward momentum as traders continued to lock in profits after finding significant gains in recent sessions. Some wheat contracts tested modest gains today, with spring wheat prices turning in the best performance. But CBOT futures trended more than 0.75% lower, while corn and soybean prices each eroded more than 1% lower.
A few additional showers could arrive in parts of the Corn Belt over the weekend. Parts of Wisconsin, Michigan and northern Illinois could gather another 0.5” or more between Friday and Monday, per the latest 72-hour cumulative precipitation map from NOAA. Further out, NOAA’s latest 8-to-14-day outlook predicts below-normal precipitation building across the Great Lakes region between August 3 and August 9, with seasonally warm weather likely for the southern half of the U.S. during this time.
On Wall St., the Dow’s 13-day winning streak is almost certainly coming to an end today after dropping 211 points in afternoon trading to 35,316 as investors mulled over the latest mixed bag of corporate earnings reports. Energy futures made solid inroads, in contrast, with crude oil up more than 1.5% this afternoon to $80 per barrel. Diesel climbed more than 2.5% higher, with gasoline up around 1.5%. The U.S. Dollar firmed noticeably.
On Wednesday, commodity funds were net buyers of soybeans (+4,000) and soymeal (+4,500) contracts but were net sellers of corn (-13,500), soyoil (-3,500) and CBOT wheat (-12,500).
Corn prices were briefly in the green overnight and early in Thursday’s session before a round of net technical selling kicked in, lowering prices by more than 1% by the close.
Corn basis bids were mostly steady to soft after dropping 4 to 15 cents lower across four Midwestern locations on Thursday. An Illinois river terminal bucked the overall trend after rising 10 cents higher today.
Corn exports found combined old and new crop sales totaling 25.6 million bushels. Old crop sales improved 15% from the prior four-week average. Total sales were near the middle of trade estimates, which ranged between 11.8 million and 39.4 million bushels. Cumulative totals for the 2022/23 marketing year remain well below last year’s pace so far, with 1.427 billion bushels.
Corn export shipments were up 7% from a week ago but down 25% versus the prior four-week average, with 16.2 million bushels. Mexico, Guatemala, Honduras, Japan and El Salvador were the top five destinations.
Traders say Algeria has purchased an as-yet unknown amount of corn in its international tender of 4.7 million bushels that could be sources from Argentina or Brazil that closed yesterday. The grain is for shipment in August.
Preliminary volume estimates were for 257,851 contracts, easing slightly below Wednesday’s final count of 271,953.
Soybean prices tested some modest gains overnight but ultimately faded more than 1% lower after a round of technical selling on Thursday. August futures lost 17 cents to $15.2925, with September futures down 16.5 cents to $14.52.
The rest of the soy complex also trended lower today. Soymeal futures dropped around 0.5%, while soyoil futures stumbled more than 2% lower.
Soybean basis bids were steady to soft after dropping 2 to 15 cents lower across four Midwestern locations on Thursday.
Private exporters announced to USDA the sale of 9.4 million bushels of soybeans for delivery to unknown destinations during the 2023/24 marketing year, which begins September 1.
Soybean exports gathered 27.3 million bushels in combined old and new crop sales last week. Old crop sales jumped 73% above the prior four-week average. Total sales were slightly on the lower end of trade estimates, which ranged between 12.9 million and 44.1 million bushels. Cumulative sales for the 2022/23 marketing year are moderately below last year’s pace so far, with 1.843 billion bushels.
Soybean export shipments climbed 74% above the prior four-week average, with 13.9 million bushels. The Netherlands, Germany, Mexico, Spain and Indonesia were the top five destinations.
Are $16 new crop soybeans possible this summer? That’s a question Naomi Blohm, senior market adviser with Stewart Peterson, has been asking herself recently. “August weather is critical to soybean production,” she notes. “Not too much heat and well-timed rains during this month can provide for exemplary yield. Conversely, high temperatures and no rain will put a damper on yield potential. Therefore, weather-watching during the month of August is paramount.” Blohm walks through recommendations for how to prepare for the possibilities in today’s Ag Marketing IQ blog – click here to learn more.
Preliminary volume estimates were for 218,448 contracts, trending 10% lower than Wednesday’s final count of 242,678.
Wheat prices were mixed but mostly lower after some uneven technical maneuvering on Thursday. September Chicago SRW futures dropped 6.75 cents to $7.1325, while September Kansas City HRW futures inched a penny higher to $8.6625 and September MGEX spring wheat futures added 8.25 cents to $9.04.
Wheat export sales reached 8.6 million bushels last week. That was on the lower end of analyst estimates, which ranged between 5.5 million and 14.7 million bushels. Cumulative totals for the 2023/24 marketing year are slightly behind last year’s pace so far, with 76.3 million bushels.
Wheat export shipments improved 46% above the prior four-week average, with 14.5 million bushels. The Philippines, South Korea, Mexico, Honduras and Nigeria were the top five destinations.
Ukraine’s deputy prime minister Kubrakov issued a statement late yesterday indicating that Russian air strikes have damaged 26 port facilities and five civilian vessels in Ukraine over the past nine days. The most recent attack occurred last night in Odesa, where a security guard was killed and a cargo terminal was damaged.
Due to excessive heat and flooding, the European Commission trimmed its outlook for 2023/24 EU soft wheat production by 1.9% for a new estimate of 4.644 billion bushels. The commission left its expectations for soft wheat exports during the current marketing year steady, at 1.176 billion bushels.
Taiwan purchased around 4.0 million bushels of milling wheat, sourced from the United States, in a tender that closed earlier today. The grain is for shipment in September and October.
Iraq, which is typically a significant wheat buyer, has strategic reserves sufficient through July 2024, according to the country’s ministry of trade.
Preliminary volume estimates were for 127,590 CBOT contracts, sliding moderately below Wednesday’s final count of 169,935.
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