TFM Midday Update 06-27-2023

CORN

The corn crop was rated 50% good to excellent vs 55% last week (and 67% last year). This is the worst rating for this time of year since 1988.
Corn (and the whole grain complex) is trading lower this morning due to increased chances for rain in the Midwest, especially in some of the areas that missed the last round of precipitation. Currently there are two potential rain events, with the second probably bringing wider coverage and heavier amounts.
Global weather conditions are mostly favorable. It is still dry in Argentina, but as of right now Australia is normal (despite the El Nino weather pattern which could bring them drought).
As of writing, July corn is nearly 75 cents above September. First notice day for July futures is this Friday, meaning any one long futures is at risk of being delivered against. With the quarterly Stocks and Acreage reports also on Friday, markets could remain volatile into the end of the week.

The soybean crop was rated 51% good to excellent vs 54% last week (and 65% last year).
On daily stochastics and the RSI, November soybeans are at or near overbought levels. Momentum is also starting to trend downwards.
Yesterday’s soybean export inspections were poor at only 5.2 mb. This may also be limiting upside in futures, and not just in soybeans. Brazil is undercutting US exports for both corn and beans, while Russia is doing the same in wheat.
July soybean futures are roughly $1 above August, reflecting tight supply of old crop. As with corn, first notice day is on Friday is sure to affect this spread, as traders who are long will need to exit the July contract.
Soybean meal and oil are also lower this morning, offering no support to soybean futures.

The winter wheat crop is 24% harvested, compared to 33% average. Crop conditions did also rise 2% from last week to 40% good to excellent.
The spring wheat crop is rated 50% good to excellent vs 51% last week (and 59% last year).
Yesterday’s concern about availability of Black Sea wheat seems to have since been quashed. The Wagner coup against Russia appears to have disintegrated, and prices faded in tandem.
Paris milling wheat futures gapped lower, also offering no support to US futures today.
Russian wheat FOB export offers a range from roughly $230 – $240 per ton, well below that of US or other world offerings. This is keeping pressure on the US market. However, there is still the possibility that Russia will not extend the Black Sea export deal on July 18th, with reports by the Ukraine Sea Ports Authority that Russia is impeding grain shipments.

Brandon Doherty