TFM Midday Update 7-16-2024

CORN

Despite storms last night with some reports of tornadoes, damage to crops does not appear to be widespread. The weather forecast also appears to be relatively benign for the majority of the Midwest.
Corn conditions held steady at 68% good to excellent, which is the highest rating since 2020 for this time of year. Additionally, 41% of the crop is silking and 8% of the crop is in the dough stage.
The stock market is surging this morning – at the time of writing the DOW is up nearly 600 points. This may be offering some spillover support to commodity markets. Outside influences, including dovish statements by Fed Chairman Powell regarding interest rate cuts, may be playing a part.

Yesterday’s NOPA crush data came out at 175.6 mb for June. While this was a new record, it was also a bit below expectations. Additionally, soybean oil stocks fell to 1.622 billion pounds which was also on the lower end of expectations.
Soybean conditions held steady at 68% good to excellent, which like corn, is the highest rating for this timeframe since 2020. Additionally, 51% of the crop is blooming and 18% of the crop is setting pods.
At midday, soybeans are attempting to recover from yesterday’s sharply lower close. Pressure yesterday may have been in part tied to concerns that there could be another trade war with China this fall (in the event Trump wins the election) that would result in China reducing US grain imports.

Despite what appears to be a turnaround Tuesday for corn and soybeans, wheat is still trading lower at the time of writing. Pressure is coming from today’s jump in the US Dollar Index back above its 200 day moving average, as well as more weakness in Matif wheat futures, which have yet to fill yesterday’s chart gap.
According to the USDA, 71% of the winter wheat crop is harvested, still well above last year’s 53% and the 62% average. Spring wheat ratings improved 2% to 77% good to excellent; this is the highest rating since 2019, and 76% of that crop is headed.
The Black Sea area has chances for some rain this week, but mostly dry and hot conditions are stressing crops. This weather has been particularly impactful in Ukraine and western Kazakhstan.

Brandon Doherty