June 7, 2023
Grains were mixed but mostly lower on Wednesday on the prospect of more rains coming to the central U.S., and as traders squared positions ahead of Friday morning’s World Agricultural Supply and Demand Estimates (WASDE) report from USDA. Wheat prices took the hardest hit, with losses ranging between 2% and 4%. Corn also moved noticeably lower after a round of technical selling today. Soybeans managed to buck the overall trend, testing modest gains amid a somewhat choppy session.
Most of the Corn Belt that’s located west of the Mississippi River will see at least some measurable moisture fall between Thursday and Sunday, while areas farther east will remain relatively dry in comparison, per the latest 72-hour cumulative precipitation map from NOAA. Further out, NOAA’s new 8-to-14-day outlook predicts some seasonally wet weather likely for parts of the Plains and western Corn Belt between June 14 and June 20, with warmer-than-normal conditions likely for most of the central U.S. during this time.
On Wall St., the Dow improved 92 points in afternoon trading to 33,665, anchored by some strong gains in the energy and online retail sectors. Energy futures also pushed higher, with crude oil up more than 1.25% this afternoon to $72 per barrel on expected output reductions from Saudi Arabia. Diesel also rose around 1.25% higher, with gasoline up more than 2%. The U.S. Dollar softened slightly.
On Tuesday, commodity funds were net buyers of corn (+6,000), soybeans (+2,500), soyoil (+6,000) and CBOT wheat (+2,000) contracts but were net sellers of soymeal (-2,000).
Corn prices suffered a technical setback after traders digested yield-friendly mid-range weather forecasts. July futures dropped 6.25 cents to $6.0175, with September futures down 12.25 cents to $5.2225.
Corn basis bids were steady to weak after spilling 10 cents lower at a Nebraska elevator and dropping 2 to 5 cents across three Midwestern ethanol plants on Wednesday.
Ethanol production for the week ending June 2 improved for the second consecutive week after reaching a daily average of 1.036 million barrels, per the latest data from the U.S. Energy Information Administration, out earlier today. Stocks increased 3% this past week.
Prior to Thursday morning’s export report from USDA, analysts expect the agency to show corn sales ranging between zero and 39.4 million bushels for the week ending June 1.
Ahead of Friday’s WASDE report from USDA, analysts think the agency will show 2022/23 corn ending stocks increasing modestly from 1.417 billion bushels in May up to 1.449 billion bushels. Individual trade guesses ranged between 1.392 billion and 1.515 billion bushels.
Brazil’s Anec expects the country’s June corn exports to reach 65.4 million bushels. That would be a year-over-year increase of 10.4%, if realized.
Algeria issued an international tender to purchase 5.5 million bushels of animal feed corn from optional origins that closes on Thursday. The grain is for shipment in August. The grain is for shipment beginning in late June.
The Philippines purchased 2.0 million bushels of animal feed corn, likely sourced from South America, in a tender that closed earlier today.
Preliminary volume estimates were for 355,666 contracts, which was moderately lower than Tuesday’s final count of 397,077.
Soybean prices managed modest gains on some light technical buying after facing some mixed overnight results. July futures added 6.5 cents to $13.5975, with August futures only firming 0.25 cents to $12.66.
The rest of the soy complex was mixed. Soymeal futures jumped 2% higher, while soyoil futures faded 0.75% to 1% lower.
Soybean basis bids were mostly steady across the central U.S. on Wednesday but did tilt 5 cents lower at an Iowa river terminal while firming a penny at an Ohio elevator today.
Prior to Friday morning’s WASDE report, analysts expect USDA to show 2022/23 soybean ending stocks increase slightly from 215 million bushels in May up to 223 million bushels. Individual trade guesses ranged between 200 million and 255 million bushels.
And ahead of tomorrow morning’s export report from USDA, analysts think the agency will show soybean sales ranging between net reductions of 1.8 million bushels and net sales of 25.7 million bushels for the week ending June 1. Analysts also expect to see soymeal sales ranging between 150,000 and 600,000 metric tons, plus up to 20,000 MT of soyoil sales last week.
Chinese soybean imports in May climbed to a record level of 441.7 million bushels, which was a year-over-year increase of 24%. The prior monthly record occurred in June 2020, when importers snatched up 411.5 million bushels. China is by far the world’s top soybean importer.
Brazil’s Anec estimates that the country’s soybean exports in June will reach 481.7 million bushels, which would be a year-over-year increase of nearly 32%, if realized. Anec also anticipates Brazilian soymeal exports will see modest increases in soymeal exports this month, which it estimates will reach 2.27 million metric tons.
Algeria issued an international tender to purchase 35,000 metric tons of soymeal from optional origins that closes on June 8. The grain is for shipment during the first half of July.
Preliminary volume estimates were for 274,240 contracts, trending moderately above Tuesday’s final count of 238,942.
Wheat prices were shocked lower by a round of technical selling largely spurred by improved weather forecasts in the U.S. and large global supplies. September Chicago SRW futures dropped 13.25 cents to $6.2675, September Kansas City HRW futures lost 29 cents to $7.8550, and September MGEX spring wheat futures fell 26.75 cents to $7.9275.
Prior to tomorrow morning’s export report from USDA, analysts expect the agency to show wheat sales ranging between 1.8 million and 22.0 million bushels for the week ending June 1. The lower guesses reflect an assumption that there were some old crop sales cancellations last week.
Ahead of the next WASDE report from USDA, analysts expect the agency to slightly raise its estimates for 2022/23 wheat ending stocks from 598 million bushels in May up to 606 million bushels. Individual trade guesses ranged between 592 million and 643 million bushels.
Taiwan issued an international tender to purchase 2.1 million bushels of grade 1 milling wheat from the United States that closes on June 14. The grain is for shipment between July 31 and August 14.
Preliminary volume estimates were for 159,309 CBOT contracts, shifting moderately below Tuesday’s final count of 218,703.
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