Corn has turned lower around midday, after news that Russia was withdrawing from the Ukrainian grain deal sent corn, soybeans, and wheat higher. Traders have grown tired of this back and forth, however, and prices are already slipping.
Russia exited the grain deal after an attack on the bridge connecting Russia to Crimea overnight, and now Ukraine will need to send exports through Europe and the Danube River.
Weather forecasts over the next 8 to 14 days have turned drier and warmer, which may add some bullishness to the market. 64% of the corn crop is still experiencing some form of drought.
Last week, China was an active buyer of Brazilian and Ukrainian corn which gave the impression that demand was picking up, but export sales for US corn have still been very sluggish due to higher prices.
As in corn, soybeans were higher to start the day but have slipped at midday and are now near lows of the day. Russia’s decision to exit the grain deal will have an impact on Ukraine’s exports of sunflower meal and oil which could impact soybean meal and oil in the US.
Palm oil exports jumped a whopping 19.3% in June and futures are higher as a result, which adds more bullish sentiment to soybean oil, especially after the grain deal announcement.
The NOPA crush report will be released later today, and traders are looking for a crush of 172 mb and soybean oil stocks to fall 1.780 billion pounds.
Chinese purchases of soybeans picked up last week, but they mainly sourced from Brazil and only bought small amounts from the US. There have been rumors that China has been buying more September and October beans from Brazil in the past week.
Wheat, which should have been the most helped by the withdrawal of Russia from the Ukrainian grain deal, is now trading lower. It appears that traders are tired of the back and forth and quickly went back to selling after the news broke.
Chicago wheat gapped higher on the open after the Russia news but just closed that gap and is sitting right at its 40 and 50-day moving average.
The US Dollar is trading at its lowest levels in over a year which should make the US more competitive regarding exports. Paris milling wheat futures were higher this morning for the third straight day, which is also supportive.
Weather for spring wheat is not looking great, and analysts have said that without substantial rains in the Canadian Prairies, Canadian production could slide another few million tons lower. North Dakota and Minnesota are also in need of rain.
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