TFM Midday Update 08-25-2023

CORN

Chairman Powell spoke this morning, indicating that the Federal Reserve may issue more interest rate increases to combat inflation. EU inflation is higher than in the US, so there is also talk that their central bank may raise interest rates as well.
There are still concerns about China’s economy and what that might do to demand for goods and food. The Shanghai Composite Index had the lowest close for the year so far. This index tracks stocks on the Shanghai Stock Exchange, and is one barometer for their economy.
Corn has traded both sides of neutral so far this morning, which is a bit disappointing given the recent heat and dryness. With that said, temperatures for much of the Midwest are cooling off and will continue to do so into the weekend.
Brazil may get some decent rains over the next week or so in the central and southern regions. This may cause harvest delays, but the moisture will help planting in the long run.
November corn on China’s Dalian Exchange closed at the equivalent of $9.43 per bushel, giving them plenty of incentive to import. However, Brazil is likely to get most of that business, keeping pressure on US exports.

Private exporters reported sales of 121,000 mt of soybeans for delivery to China during the 23/24 marketing year.
Both the 6-10 and 8-14 day forecasts are mostly dry and warm for the Midwest, which may cause further stress to the crop.
October soybean meal saw an $11.10 gain yesterday, offering support to beans and incentivizing processors to crush.
November soybeans on China’s Dalian Exchange closed at a new high this year, at the equivalent of $19.03 per bushel.

Chi wheat has traded both sides of neutral this morning, but is lower at midday. Pressure is being added by the US Dollar Index, which continues to trend higher, reaching the highest level in almost three months.
Stats Canada will release crop production estimates on Tuesday, August 29. There is some expectation that their wheat production will fall below the USDA estimate of 33 mmt, due to the dry weather they have experienced.
According to consultancy group, Agritel, Russia’s 23/24 wheat exports are expected to be record large at 49 mmt. Additionally, the production estimate from Sov Econ is up 5 mmt from last month.
Reportedly, Turkey is advocating for the re-opening of the Black Sea export corridor. They are encouraging Russia to allow this to take place and government officials may be meeting with Putin.
Ag Resource has reduced their projection of the Argentina wheat crop from 17.5 mmt to 15.9 mmt.

Brandon Doherty