Market News

Wheat leads on global supply concerns

Soybeans were mostly higher, adjusting spreads. Most forecasts have warm, dry weather late this month into next month, potentially stressing the crop and trimming yields. The USDA’s updated yield and production projections are out August 11^th in the monthly supply and demand report. Soybean meal was mixed on bull spreading, while soybean oil was up sharply on oversold signals and demand expectations. Grain trade group ANEC projects Brazil’s soybean exports for July at 8.8 million tons, compared to the year ago total of 7 million, with soybean meal exports of 2.584 million tons, which would also be above last year. The USDA’s weekly U.S. sales numbers are out Thursday morning. Demand for U.S. soybeans has slowed along seasonal levels with about a month and a half remaining in the 2022/23 marketing year.

Corn was higher on fund and technical buying. Corn is watching the weather and the likelihood of a more stressful pattern in much of the region into early August. That’s going to have an impact during pollination in some key growing areas and could have an impact on yields. Rainfall totals and coverage this week in the Corn Belt have been widely mixed. The trade is also monitoring the ongoing harvest of Brazil’s second crop, with delays in some areas. Brazilian grain trade firm ANEC sees July 2023 corn exports at 6.8 million tons, compared to 5.63 million in July 2022. The U.S. Energy Information Administration says ethanol production last week averaged 1.07 million barrels a day, the highest since early December 2022, an increase of 38,000 on the week and 36,000 on the year, while stocks were reported at 23.166 million barrels, 508,000 more than the previous week, but 387,000 less than a year ago.

The wheat complex was sharply higher on fund and technical buying. Russia has attacked Ukrainian Black Sea ports since leaving the Black Sea Grain Initiative, throwing global supplies into question. Moscow has also said that ships bound for Ukraine’s Black Sea ports will be treated as hostile. It remains to be seen how much this will actually boost U.S. exports as Russia continues to control the export market due to a significant price advantage. The biggest blow is expected to be to global food security, impacting some of the world’s most vulnerable nations and people. Most forecasts for the northern U.S. Plains and Canada are expected to see scattered showers this week, providing limited relief for spring wheat, but potentially missing some of the drier areas. More winter wheat harvest delays are expected in parts of the Midwest and Plains.