Corn is starting the day lower following yesterday’s short covering rally as it struggles to gain positive footing with mostly favorable weather forecasts and the surprise jump in acres.
The front moving through the Midwest has produced some moisture, but amounts have largely been disappointing. Temperatures are expected to stay mild with the potential for more showers next week.
The latest release of the US Drought Monitor indicated that 67% of the corn crop remains in drought conditions, down 3% from the week prior. With more rain in the forecast for the Corn Belt, it could be expected to fall further.
Brazil’s corn basis levels have seen some significant improvement with harvest only 20% complete, and active soybean sales taking precedence to make room for the safrinha corn crop. This improvement has likely added some support to US corn prices, and though they remain 25 – 35 cents/ bu. above Brazil, the gap has narrowed.
Yesterday the managed funds were active buyers in the corn market, purchasing upwards of 8,000 contracts. They are currently estimated to be long 26,000 contracts.
Soybeans are trading lower this morning as traders continue to take a breather and reduce long positions. Like soybeans, soybean meal is also lower this morning, while bean oil is higher.
The front moving through the Midwest has produced some moisture, but amounts have largely been disappointing. Temperatures are expected to stay mild with the potential for more showers next week. Weather conditions in the Northern Plains are mostly favorable and may see some isolated showers over the next five days with cooler temperatures to help ease crop stress.
The area of the US soybean crop that is in drought areas dropped 3% to 60%. While is still a significant area, given the recent rain throughout the Corn Belt, it is expected to drop further.
The managed funds were active sellers in yesterday’s session, reducing their long position by an estimated 6,500 contracts. They are now estimated to be long 86,500 contracts.
The wheat market is mostly lower this morning in all three classes, with deferred contracts in K.C. and Minneapolis trading higher.
Weather conditions in the Northern Plains are mostly favorable and may see some isolated showers over the next five days with cooler temperatures to help ease crop stress.
The central and southern Plains will continue to see showers and thunderstorms over the next week with mild temperatures. Though the conditions are largely favorable, the rain may slow the wheat harvest.
Managed Funds were net sellers yesterday in the wheat market, adding an estimated 6,000 contracts to their short position, which is now estimated to be short 61,000 contracts.
Ukraine’s Ag Ministry reported current 23/24 grain exports at 497k tons, which compares to 318k tons for 2022. Of the total, 177k is reported to be wheat and 273k tons of corn, most of which was exported via the Black Sea.
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