TFM Morning Update 07-26-2023

CORN

Corn is trading lower this morning as scattered showers appear on the radar for Minnesota and Wisconsin with heavier rains to be expected there over the next few days, but the Corn Belt’s forecast remains hot and dry.
In Brazil, September corn on the Bovespa exchange is trading near the US equivalent of 5.07 a bushel due to their record 2023 corn crop, and the US is struggling to compete with exports.
Estimates for ethanol production and stockpiles sees production lower than last week at 1.058 million barrels per day, and the stockpile estimates slightly higher than a week ago.
Brazilian corn exports were seen reaching 6.43 mmt in July compared to an estimated 6.8 mmt forecast the previous week.

Soybeans are trading higher this morning led by gains in soybean meal while soybean oil trades lower. The weather outlook into August has trade worried about final yields which has helped support prices.
While Brazil’s record soy crop has made US soy exports difficult, good demand for soy products domestically has been a very bearish factor sending new crop contracts nearly to contract highs.
The current incentive to crush soybeans is near its highest levels on record due to big boosts in the values of soybean meal and oil.
19% of the Midwest is in D2 to D4 drought conditions with soy crops also dealing with hot temperatures. Some analysts believe that the USDA’s estimate for 52.0 bpa soybeans is too high.

Wheat is trading lower this morning as traders tire of news out of the Black Sea and focus on the crop at home with new yield estimates from the wheat tour.
It is day 2 of the Wheat Quality Council’s Spring Wheat and Durham Tour, and yesterday’s tour ended with a yield estimate of 48.1 bpa which is below last year, but was higher than the USDA’s estimate of 47 bpa.
The International Monetary Fund said that the suspension of the Black Sea grain deal could drive global prices up by 10-15%, but much of this is likely already priced in.
The Russian wheat harvest has been slowed by heavy rains, and only 14% of planted areas have been harvested as of July 20, compared to 22% last year.

Amanda Brill