Traders spent Tuesday squaring positions ahead of tomorrow morning’s World Agricultural Supply and Demand Estimates (WASDE) report from USDA, and the result was a lot of technical buying that pushed corn, soybeans and wheat higher. August soybean futures firmed 1.1% by the close, while September corn futures added 0.4%. Wheat gains were even more robust amid ongoing geopolitical issues in the Black Sea region, as a key shipping deal there will expire next week if it is not otherwise extended before the deadline.

More rainy weather is likely for the Corn Belt later this week, with many fields likely to get 1” or more between Wednesday and Saturday, per the latest 72-hour cumulative precipitation map from NOAA. Above-average rainfall is also likely for the eastern Corn Belt between July 18 and July 24, according to NOAA’s new 8-to-14-day outlook. Seasonally warm weather is also likely for most of the United States during this time.

On Wall St., the Dow rose 209 points in afternoon trading to 34,153 as investors await the next round of inflation data that will be released on Wednesday and Thursday. Energy futures were also in the green, with crude oil rising around 2.25% higher to $74 per barrel on bullish global demand. Diesel moved 1% higher, with gasoline up nearly 2%. The U.S. Dollar softened moderately.

On Monday, commodity funds were net buyers of corn (+4,500), soybeans (+10,000), soymeal (+2,000) and soyoil (+8,000) contracts but were net sellers of CBOT wheat (-1,000).

Corn

Corn prices followed soybeans higher despite unexpected quality improvements made by USDA yesterday afternoon. Analysts are eager to see the agency’s next set of supply and demand data, out tomorrow morning. July futures added 3.25 cents to $5.74, with September futures up 2 cents to $4.9425.

Corn basis bids were steady to firm after rising 2 to 11 cents across five Midwestern locations on Tuesday.

Corn quality made solid inroads this past week after trending four points higher to reach 55% rated in good-to-excellent condition through July 9. That was a bigger jump than analysts were expecting. Another 31% of the crop is rated fair (down three points from last week), with the remaining 14% rated poor or very poor (down one point from last week).

Physiologically, 22% of the crop is now silking, up from 8% a week ago and slightly ahead of the prior five-year average of 21%. And 3% has reached the dough stage, also slightly ahead of the prior five-year average of 2%.

Ahead of tomorrow morning’s WASDE report from USDA, analysts expect the agency to show 2023 U.S. corn production potential at 15.234 billion bushels, assuming average yields of 176.6 bushels per acre. Individual trade guesses ranged between 14.884 billion and 15.530 billion bushels. Ending stocks are expected to increase slightly from June’s tally of 2.257 billion bushels, moving to 2.260 million bushels. Larry Shonkwiler, senior agricultural economist with Advance Trading, offers some additional analysis ahead of tomorrow’s report in the latest Ag Marketing IQ blog – click here to learn more.

Per the latest data from the European Commission, the 2023/24 marketing year has begun for corn imports, which reached 8.9 million bushels over the first nine days of July. That’s moderately below last year’s pace so far, but there’s obviously ample time to widen or reverse this gap moving forward.

Preliminary volume estimates were for 233,379 contracts, tracking moderately higher than Monday’s final count of 186,107.

Soybeans

Soybean prices captured double-digit gains on expectations of lower production potential amid already tight stocks. July futures rose 12.5 cents to $15.2050, with August futures up 16 cents to $14.7150.

The rest of the soy complex was mixed. Soymeal futures jumped nearly 2.5% higher, while soyoil futures faded nearly 1% lower.

Soybean basis bids were steady to weak after trending 5 to 22 cents lower across five Midwestern locations on Tuesday.

Soybean quality improved slightly last week, with 51% of the crop now rated in good-to-excellent condition. That was slightly below analyst expectations to see G/E ratings reach 52%, however. Another 34% is rated fair (down one point from last week), with the remaining 15% rated poor or very poor (unchanged from last week).

Physiologically, 39% of the crop is now blooming, up from 24% a week ago and faster than the prior five-year average of 35%. And 10% is now setting pods, up from 4% a week ago and also faster than the prior five-year average of 7%.

Prior to Wednesday morning’s WASDE report from USDA, analysts anticipate the agency will show soybean production at 4.253 billion bushels, assuming average yields of 51.4 bushels per acre. Individual trade guesses ranged between 4.176 billion and 4.314 billion bushels. Ending stocks are expected to tighten from 350 million bushels in June down to 199 million bushels.

The European Commission is now tracking EU soybean imports for the 2023/24 marketing year, which have reached 5.2 million bushels during the first nine days of July. EU soymeal imports reached 205,060 metric tons during the same period.

Preliminary volume estimates were for 176,558 contracts, shifting modestly above Monday’s final count of 155,604.

Wheat

Wheat prices shifted 1% to 2% higher on a round of technical selling partly spurred by concerns that Russia won’t extend a deal that allows shipping vessels safe passage through the Black Sea. Negotiations are ongoing ahead of next Monday’s deadline. September Chicago SRW futures rose 13.75 cents to $6.60, September Kanas City HRW futures added 8 cents to $8.1925, and September MGEX spring wheat futures climbed 17.25 cents to $8.6750.

Winter wheat quality ratings were mostly stable this past week, with 40% still rated in good-to-excellent condition. Another 32% is rated fair (up a point from last week), with the remaining 28% rated poor or very poor (down a point from last week). Analysts were expecting the winter wheat harvest to pass the halfway mark this past week, but USDA shows only 46% is complete so far. That puts this season well below last year’s pace of 62% and the prior five-year average of 59%.

Spring wheat quality slid a point lower last week, with 47% of the crop now rated in good-to-excellent condition. Analysts were expecting to see a one-point gain. Another 37% of the crop is rated fair (down three points from last week), with the remaining 16% rated poor or very poor (up four points from last week). Physiologically, 72% of the crop is now headed, up from 51% a week ago. It’s also much swifter than 2022’s pace of 41% and moderately ahead of the prior five-year average of 67%.

Prior to tomorrow morning’s WASDE report from USDA, analysts think the agency will slightly increase wheat ending stocks from 562 million bushels in June up to 569 million bushels. Individual trade guesses ranged between 533 million and 607 million bushels.

EU soft wheat exports during the young 2023/24 marketing year have reached 13.3 million bushels through July 9, which is a moderate year-over-year decline so far.

France’s farm ministry is expecting the country’s soft wheat production to firm 4% above last year’s tally, offering a new estimate of 1.286 billion bushels. The country enjoyed some timely rains last month but is still battling widespread hotter-than-normal conditions in recent weeks. France is Europe’s No. 1 wheat producer.

Japan issued a regular tender to purchase 4.5 million bushels of food-quality wheat from the United States, Canada and Australia that closes on Thursday. Of the total, 24% is expected to be sourced from the U.S. The grain is for shipment in September.

Preliminary volume estimates were for 69,959 CBOT contracts, which was slightly below Monday’s final tally of 70,698.