June 28, 2023
Some much-needed rains are falling in southern Iowa and central Illinois today, and more wet weather is expected to help out thirsty crops across the Corn Belt later this week into early July. Because of that, traders continued to engage in a lot of technical selling that left grain prices sharply lower again on Wednesday. Corn losses topped 4%, with soybeans down more than 2%. Wheat losses were variable, largely ranging between 3% and 4.5%.
Most of the Midwest will receive at least some measurable moisture between Thursday and Sunday, with a band stretching from Nebraska through southern Indiana and parts of Ohio likely to deliver another 1” or more during this time, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s new 8-to-14-day outlook calls for seasonally wet weather for the entire central U.S. between July 5 and July 11, with warmer-than-normal temperatures also likely in some areas in the week following Independence Day.
On Wall St., the Dow shifted 99 points lower in afternoon trading to 33,827 following remarks from Federal Reserve chair Jerome Powell, who indicated there will likely be additional interest rate hikes later this year. Energy futures jumped higher, with crude oil up more than 2.5% this afternoon to $69 per barrel. Gasoline climbed more than 3% higher, with diesel up around 1%. The U.S. Dollar firmed moderately.
On Tuesday, commodity funds were net buyers of soyoil (+3,500) contracts but were net sellers of corn (-15,000), soybeans (-14,500), soymeal (-7,000) and CBOT wheat (-14,500).
Corn prices incurred heavy losses following another round of technical selling on Wednesday, largely due to expected rains in the Midwest over the next two weeks. July futures lost 30.75 cents to $5.9225, with September futures down 23.25 cents to $5.33.
Corn basis bids were steady to mixed across the central U.S. after trending as much as 10 cents higher at an Iowa processor and as much as 15 cents lower at a Nebraska elevator on Wednesday.
Private exporters announced the sale of 6.7 million bushels of corn to Mexico. Of the total, 13% is for delivery during the current marketing year, which began September 1, with the remainder for delivery in 2023/24.
Ethanol production for the week ending June 23 held steady with a daily average of 1.052 million barrels, per the latest data from the U.S. Energy Information Administration, out Wednesday morning. It was also the fifth consecutive week that production stayed above the 1-million-barrel-per-day benchmark. Ethanol stocks trended 1% higher last week.
Prior to Thursday morning’s export report from USDA, analysts expect the agency to show corn sales ranging between net reductions of 3.9 million bushels and net sales of 27.6 million bushels for the week ending June 22.
Ahead of USDA’s highly anticipated acreage and stocks report, which will be released Friday morning, analysts expect the agency to list final 2023 corn acreage at 91.853 million acres, versus 2022’s tally of 88.579 million acres. Quarterly stocks are expected to move from 7.401 billion bushels as of March 1 down to 4.255 billion bushels.
Are analysts expecting any big surprises in the highly anticipated June 30 acreage and stocks reports from USDA? “Big changes in these June reports are the exception, but they do occur,” notes grain market analyst Bryce Knorr. “The granddaddy of these adjustments came in 1983, the year farmers idled millions of acres to participate in in the government’s PIK program, only to watch as corn fields withered when a blast of hot, dry weather baked fields at pollination.” Knorr offers his best guess at corn acres and looks at the latest weather trends in a recent Ag Marketing IQ blog – click here to learn more.
Brazil’s Anec estimates that the country will export 45.5 million bushels of corn in June, which is modestly below the group’s prior projection from a week ago.
Preliminary volume estimates were for 563,565 contracts, shifting moderately above Tuesday’s final count of 503,319.
Soybean prices continued to erode lower following another round of technical selling on Wednesday, incurring double-digit losses by the close. July futures lost 41.75 cents to $14.5325, with August futures down 31 cents to $13.6450.
The rest of the soy complex also faced noticeable cuts today. Soymeal futures were down around 1.5%, while soyoil futures trended 1% to 2% lower.
Soybean basis bids were mostly steady across the central U.S. on Wednesday but did slide 2 cents lower at an Ohio elevator and 2 cents lower at an Iowa river terminal today.
Ahead of tomorrow morning’s export report from USDA, analysts think the agency will show soybean sales ranging between 7.3 million and 25.7 million bushels for the week ending June 22. Analysts also anticipate seeing soymeal sales ranging between 50,000 and 400,000 metric tons, plus up to 20,000 MT of soyoil sales.
Prior to Friday morning’s acreage and stocks reports from USDA, analysts think the agency will show 2023 U.S. soybean plantings were at 87.673 million acres, which would be modestly above 2022’s mark of 87.450 million acres, if realized. Quarterly stocks are expected to face notable declines, moving from 1.685 billion bushels as of March 1 down to 812 million bushels.
European Union soybean imports during the 2022/23 marketing year are down around 11% year-over-year after reaching 471.8 million bushels through June 25, per the latest data from the European Commission, out earlier today. EU soymeal imports are also moderately lower from last year’s pace, with 15.62 million metric tons over the same period.
Brazil’s Anec anticipates that the country’s soybean exports will reach 521.8 million bushels in June, which is slightly below the group’s prior projection from a week ago. Anec also expects Brazilian soymeal exports will reach 2.137 million metric tons this month.
Preliminary volume estimates were for 264,407 contracts, inching slightly above Tuesday’s final tally of 263,751.
Wheat prices saw severe cuts once again on Wednesday as more cooperative weather is expected to arrive in key production areas over the next couple of weeks. Harvest progress also continues, replenishing supplies amid already stiff overseas competition. September Chicago SRW futures fell 30 cents to $6.69, September Kansas City HRW futures lost 34.75 cents to $8.0475, and September MGEX spring wheat futures dropped 25.5 cents to $8.1975.
Prior to Thursday morning’s export report from USDA, analysts expect to see wheat sales ranging between 1.8 million and 14.7 million bushels for the week ending June 22.
Ahead of USDA’s acreage and stocks report on Friday, analysts expect to see final 2023 all-wheat acres at 49.656 million acres. That would be nearly 4 million more acres than 2022’s tally, if realized. Quarterly stocks are expected to decline from 946 million bushels as of March 1 down to 611 million bushels.
According to the latest Statistics Canada survey, Canada’s all-wheat plantings increased 6.7% year-over-year, with an estimated total of 26.922 million acres. Canadian barley plantings also trended 3.9% higher this year, with an estimated 7.321 million acres.
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