CORN HIGHLIGHTS:

• December corn futures closed the day lower, posting a new low for this most recent move as selling pressure in the wheat market and the prospects of improving August weather kept sellers active.
• Short term weather models are keeping temperature cool with mixed rain forecasts, which should help fill out the recently pollinated corn crop.
• USDA weekly crop rating saw a drop of 2% good/excellent to 55% good/excellent. Northern and western states saw the biggest impacts of the heat on crop conditions, while late in the week rainfall helped support central and eastern crops. Illinois has improved its crop ratings for five consecutive weeks.
• Crude oil is trading over $80.00 a barrel, and with lower corn prices, ethanol margins should be improved, which should help support the corn market.
• The corn market is weak technically, with psychological support likely at the $5.00 level, but if weather forecasts are realized, and the market lacks bullish news, a test of the July $4.81 low for December futures could be a possible target.

SOYBEAN HIGHLIGHTS:

• Soybeans began the day lower on August forecasts showing wetter and cooler weather, but ultimately ended the day higher, thanks to gains made in both soybean meal and oil. Yesterday’s crop progress report may have added support.
• The Crop Progress reports showed soybean ratings declining more than the average guess with good to excellent ratings falling 2 points to 52%. 83% of the crop is blooming and 50% is setting pods. If forecasts hold up for August, soybean ratings could easily improve.
• Monday’s EIA report showed soybean oil use for biofuel production was a record 1.141 bil. lbs. in May, which was up 23% from April’s numbers and a 33% increase from May 2022. Year to date usage also increased 13% from year ago levels to 7.6 bil. lbs.
• There has been some export activity in soybeans, which has been supportive over the past few days, and another new crop sale was announced as sold to China on Monday of 4.9 mb. The one-week total of new soybean sales to China and unknown destinations is now 70.5 mb.
• Census crush will be released today, and the average trade guess is 175.5 mb for June, which would compare to 189.3 mb in May. Despite the slip, domestic demand has been stout, thanks to profitable crush margins.

WHEAT HIGHLIGHTS:

• While there have not been any major new headlines regarding the Black Sea conflict, Ukraine is said to be talking about using Croatian ports for exports of grain. There is still much uncertainty though, given last week’s Russian attacks on the river terminals.
• The Crop Progress report said winter wheat harvest is 80% complete. It also showed a 7% drop in spring wheat condition to 42% good to excellent, versus 70% at this time last year. This is likely why MPLS futures had more support today compared with Chi and KC.
• According to CONAB, as of July 22, 97.9% of Brazil’s wheat crop has been planted. Argentina is said to have 96.4% of their wheat crop planted as of July 26, according to Bolsa de Cereales.
• The weather bureau in Australia said that the El Nino weather pattern remains likely to bring hotter and drier weather. This could reduce rain in the eastern part of the country, threatening the wheat crop.
• Algeria finalized a tender for 700-800 metric tons of milling wheat for fall shipment. However, this is likely to be sourced from Russia as they continue to dominate the export market with cheap offers.

DAIRY HIGHLIGHTS:

• Similar to last Tuesday, spot cheese followed up a large Monday gain with an even Tuesday trade, but Class III futures faltered.
• August dropped 24 cents to $17.45 while September fell 57 cents to $17.53 in a continuation of the recent back-and-forth volatility.
• Class IV futures faced light to moderate losses with the August contract dipping back under the $19.00 mark.
• Spot butter dropped a penny while powder fell a half cent to add to the slightly negative sentiment.
• The Global Dairy Trade Index hit its lowest point in nearly three years today as dairy products around the world continue to deflate.

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Author

Brandon Doherty