TFM Morning Update 07-14-2023 - Total Farm Marketing by Stewart-Peterson

CORN

The corn market is trading higher this morning and near the top end of its range, with support likely coming from a lower US Dollar and slow farmer selling.
US export sales commitments for the 22/23 corn crop at 1.555 bb are down 35% from last year’s levels, and current 23/24 sales commitments at 159 mb are down from year-ago levels of 269 mb, the lowest since 2019.
According to the Rosario Grain Exchange, Argentina’s corn production is seen at 32 mmt, which is down 40% from previous expectations. Additionally, harvest has been slow and is estimated at only 40% complete due to high moisture.
The latest US Drought Monitor shows 64% of the corn crop is in a drought area, though down 3% from last week with the recent rainfall, leading some to question the USDA’s current yield forecast of 177.5 bpa.
Some areas of the Midwest will see enough rain through the middle of next week to boost soil moisture, but some will miss out, creating a mixed bag of conditions for developing corn and soybeans, while long-range forecasts show the possibility of drier conditions in the North/Central Midwest.

Thoughts of a better US economy following yesterday’s friendly inflation data and a lower US Dollar are offering support to the soybean complex which is trading near its highs so far this morning.
Updated Producer Price Index, or PPI, information released yesterday showed inflation levels are slowing, reducing the possibility of further rate hikes by the Fed.
Following Wednesday’s surprising USDA report, some are questioning the USDA’s 52 bpa yield estimate with 57% of the US soybean crop experiencing some level of drought, though this is down 3% from last week.
Some areas of the Midwest will see enough rain through the middle of next week to boost soil moisture, but some will miss out, creating a mixed bag of conditions for developing corn and soybeans, while long-range forecasts show the possibility of drier conditions in the North/Central Midwest.
Total export sales commitments for 22/23 are down 11% from last year versus the USDA’s revised estimate of a 8% reduction. Total sales commitments for 23/24 are only 153 mbu which are historically low compared to 509 mbu sold last year at this time.

The wheat markets are trading higher this morning on talk of India banning rice exports, and possibly wheat exports as well.
Considering India is the world’s largest rice exporter this may add demand to wheat as the next closest substitute.
Currently, 52% of the winter wheat crop is experiencing drought, down 2% from last week, while spring wheat areas in drought climbed 6% to 25% as the dryness continues in the northern Plains.
The Northern Plains are expected to have a couple of chances for rain in the next week, but amounts are expected to be below normal with below-normal temperatures. The central/southern Plains are expected to receive periodic rainfall with a decent frequency of activity for this time of year with mild temperatures, although the rainfall may further disrupt wheat harvest.
Minneapolis wheat could lead the wheat complex higher with the growing dryness in the region and falling crop conditions.

Scott Masters