August 15, 2023
Good morning,
All commodities are lower to start the day with corn down 9, soybeans down 9 and wheat down 17.
Corn condition ratings rose two points this week to 59% good/ excellent, up from 57% last year but below the 63% five-year average figure; corn progress metrics remained roughly at or ahead of comparables at 96% silked, 65% doughed, and 18% denting.
Soybean ratings jumped five points to 59% g/ex, now up from 58% LY but behind the 61% 5YA; soybean blooming and pod-setting remained ahead of comparables at 94% and 78%, respectively.
Pro Farmer starts their tour of the Midwest next week, just as the hot weather spreads across the US. The markets seem to have some weather fatigue as the longer-term forecast has turned bullish and prices really have not. Prices historically bottom in August and head higher from here, but we need to see some change in demand to move them much higher.
Have a Safe Day!
Garry Gard
920-348-6844
August 10, 2023
Good morning,
Corn is up 3 and soybeans are up 13 to start the day with a ridge in the forecast and continued conflict in Ukraine.
Ukraine announced a “humanitarian corridor” on Thursday to let dozens of cargo ships trapped in its ports since the outbreak of war last year sail into the Black Sea, where shipping routes are under scrutiny since Russia quit a deal to allow grain exports. At least initially, the corridor appears to apply to vessels such as container ships that have been stuck in Ukrainian ports since the Feb. 2022 invasion and were not covered by the deal that opened the ports for grain shipments last year.
The Ridge setting up in Texas pushing heat up North is causing a major shift in what the models look like this morning. The rain is getting pushed up into the Northeast, which is the opposite of yesterday. This makes sense and would verify that this ridge will develop.
Look for the markets to chop sideways today with the USDA crop report out tomorrow. Early estimates do not look for any big changes although the August report often has them.
Have a Safe Day!
Garry Gard
920-348-6844
August 9, 2023
Good morning,
Corn is down 2, soybeans are up 5 and wheat is down 17 to start the day.
Wet and cool weather prevails around the Midwest in the 1–5-day range but does appear to be moving out around the 22nd of August with a hot air mass expected to build by then. Current and forecasted rains will improve crop conditions and potential of both corn and soybeans.
Traders will begin to position for Fridays USDA report which will be interesting. The average trade guesses for Friday’s report is calling for a 2 bpa drop in the national corn yield from 177.5 bpa down 175.5 bpa. Soybean yields are expected to drop almost a bushel from 52 bpa down to 51.3 bpa. No material changes are expected for old crop carryout. While corn production is expected to dip 185 mbu, the carryout is expected to fall less than 100 mbu to 2.168 bln thanks to about 90 mbu of expected demand rationing. Soybean production is expected to dip about 50 mbu while carryout is expected to decline about 30 mbu to 267 mbu.
With US prices still at a significant premium to South American corn prices we are going to be stuck in the sub $5 levels on the CBOT. We would need a major drop in yield to get stocks to a concerning level and that doesn’t appear to be in the cards. Producers should be getting rid of any old crop bushels they have and make new crop sales for bushels they are not able to store.
Have a Safe Day!
Garry Gard
920-348-6844
August 7, 2023
Good morning,
Markets are lower to start the day with corn down 6 and soybeans down 40 on favorable weekend rains.
The weekend rainfall totals were the heaviest of the summer and it’s weighing on beans this morning. Prices opened sharply lower again leaving a gap behind. We’ll see if the beans can hold around the $13 area. Corn has broken through the $5 level and may continue lower if weather conditions remain the same and Friday’s report doesn’t give us support.
Crop conditions out this afternoon that could see a slight improvement on the good/excellent. After the weekend rains traders expect ratings in beans to take the big jump next week. There is a USDA Crop Report on Friday where the traders will focus on what the USDA does to corn and soybean yields.
Weather and tensions in the Black Sea continue to dominate grain headlines and price action, but Friday’s August WASDE report will shift into the spotlight this week as traders start to position themselves for the USDA’s balance sheet adjustments.
Have a Safe Day!
Garry Gard
920-348-6844
August 4, 2023
Good morning,
Markets had some life last night and early this morning with corn up as much as 14 and soybeans as much as 16. The rallies have been limited and corn is currently trading 3 higher and soybeans are 6 higher.
The overnight rally was the result of Ukraine bombing a Russian navel ship in that was carrying grain. This is the first Russian ship that has been hit, which had traders thinking about interruptions of wheat exports.
An OPEC+ ministerial panel which met on Friday made no changes to the group’s current oil output policy after a Saudi decision to extend its voluntary production cut into September helped oil prices rally further.
The panel, called the Joint Ministerial Monitoring Committee, can call for a full meeting of the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, known as OPEC+, if warranted.
Oil prices rose more than 14% in July compared with June, the biggest monthly percentage increase since January last year, as tighter supply and rising demand outweighed concern that interest rate hikes and stubborn inflation could hit economic growth.
Historically August is a low in the markets as there is not a lot of action or news to move things higher. I believe we could still test the December lows around 4.81, but do feel that we will fill the GAP at 5.24 from the end of July.
Have a Safe Weekend!
Garry Gard
920-348-6844
ggard@didioninc.com
