Afternoon report: Despite some decent showings in export sales, markets dropped with further reports of rain and cooler temps next week.
Note: Guest commentary provided by Cat Sullivan, ag risk management advisor for Advance Trading, Inc.
Corn
Corn traded mostly lower today as the weather forecast continues to be largely non-threatening. September corn settled at $5.75 3/4 , down 16 1/2 cents on the day. December Corn settled at 5.73 1/2 , down 16 1/2 cents on the day.
Corn Export Sales totals released this morning were decent. 1.3 million bushels of old crop were sold in this last week with the trade figuring the range to be from -4 mbu to sales just over 8 mbu. New crop sales came in at 22.4 mbu, above the 4-20 estimated range. Milo Export Sales numbers were light. 230 thousand bushels were sold versus 2.3 mbu per week needed to meet the export forecast.
China’s sow herd was 42.77 million head, up 2% from May but 6% below a year ago. This is the second month in a row of herd increases after a year of falling stocks. Production has increased recently due to the rise in hog prices. The herd is forecasted to increase in the next two months as well. Hopefully this will bring some grain demand the U.S. will supply. Possibly not related, but there are reports Sinograin and Cofco are price checking February and March U.S. soybeans. Purchases of 8-12 cargoes of new crop soybeans were said to have been transacted.
ANEC trimmed its July Brazilian corn export forecast 300 K to 5.9 million MT. Even so, it is still nearly double the July 2021 total of 3 million MT.
Ukraine’s corn exports to China for the Jan-June period totaled 4.9 MMT, a 23% decline from the 6.4 million shipped last year. The reduction has not been for the benefit of the U.S. as our exports to China of 8.4 MMT are down 5% from last year.
European Union corn imports for the July 1-10 period totaled 348 K MT. This is up 8% from a year ago. The origins included Ukraine, who shipped 248 K MT or 45% more than last year; Canada at 44 K; Brazil at 26 K; Serbia with 17 K; and Moldova with 12 K.
Soybeans
Soybeans had another hard day despite relatively okay export sales. With the Brazilian Real falling over 1% and the benign weather outlook, August Soybeans settled at $14.18 1/2 , down 30 1/2 cents on the day. November futures closed down 30 3/4 cents at $13.01 1/2 . This is the lowest settlement price for November soybeans since Jan. 19 of this year.
Soybean Export Sales had a good showing for old crop beans while new crop was mid-range. Old crop sales totaled 7.5 mbu beating the trade expectations that ranged from (7) to +7. New crop sales totaled 9.4 mbu which was slightly above the middle as 0-18 were estimated. China did buy 5.4 mbu of 21-22 beans and 5.0 mbu for 22-23.
In Product Export Sales, soybean meal improved from the meager 8 K last week to 109 K this week, landing above the 89 per week implied USDA pace. New crop meal, however, fell from 146 K last week to 28 k this week. Nearly 90% of the soybean meal sales were to the Philippines but there was not much interest otherwise. Soybean oil sales were down slightly from last week with 600 tonnes of old crop reported. The implied weekly pace is 9.1 MT.
ANEC revised its estimate of Brazil’s July soybean exports 700 K lower to 7.2 MMT, against 8.7 a year ago. However, soybean meal shipments continue at a robust pace with the latest estimate 100 K greater at 2.2 million which is a 1/2 MMT increase over the July 2021 total.
The EU booked a Brazilian soybean vessel for early/mid-August loading, indicative that Brazil is still the cheapest origin for the time being. Brazil is as much as $20 per MT BELOW the U.S. Gulf for CNF beans to China. The ocean freight market finds dry bulk rates from Brazil to China firming $.50/MT the past week to $58 while Gulf to China rates were $4 weaker at $68.50 and the PNW-China route was $1.75 softer at $40/MT.
The European drought has cut water levels on the Rhine River to the point where vessels can only be loaded up to 30 to 50% of capacity. The EU imported 16% fewer soybeans the 1st two weeks of July versus a year ago, but soybean meal imports on the other hand, were up more than 40%.
China’s January-June soybean imports of 46.3 MMT trail last year by about 2 1/2 MMT.
Wheat
Wheat could not hold onto its early gains today despite good export sales numbers. Chicago Wheat dropped to $8.06 1/4 , down 13 1/4 cents on the day. September KC Wheat settled at $8.61 1/4 , down .09 1/4 on the day while Minneapolis Wheat dropped .11 3/4 settling at $9.12 1/2 .
Today’s Wheat Export Sales were down from 37.4 mbu last week to 18.8 mbu. The trade ideas were 11-31 mbu with 11 per week needed. Sales by Class for HRW were 5.2 mbu this week (8.9 last week); HRS had 6.8- mbu (8.6); SRW sold 3.4 mbu (7.8); White wheat had 3.4 mbu (11.1); and Durum had zero (1.1).
Egypt re-entered the wheat market yesterday, buying 420 K European Union wheat along with 220 from Russia.
Is the Russian crop larger than expected? SovEcon boosted its production estimate 1.7 million to 90.9, almost 10 MORE than the July WASDE. They may have to scale back the 42.6 MMT export estimate as business remains sluggish (USDA: 40.0).
Weather
Corn Belt temperatures are expected to be near normal over the next week with rain amounts between 1/2 and 2 inches.
The Southeast U.S. is expected to get 1/2 to 2 inches during the period with some amounts of up to 3 inches as temperatures average near to above normal.
Delta rains could total 1/3rd to 1 1/2 inches with near to above normal temperatures. Temperatures are likely to be near to above normal.U.S. HRW areas are forecast at 1/10 to 3/4 of an inch through the middle of next week with 1-2 inches possible in the Central and North. Temperatures are forecast to be near to above normal there as well.
The western portions of the Former Soviet Union are forecast to receive 1/3 to two inches of rain through Wednesday in around 75% of the region.
The Canadian Prairies are forecast to receive 1/10 to 3/4 of an inch during the next week in over 65% of the region with a few pockets receiving more than one inch. Temperatures are expected to be near to below normal.
The forecast period has Europe receiving 1/10 to 1″ in the northern half of the region with a few greater amounts and little to no rain in the south. Temperatures are expected to be above to well above normal.
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CBOT Settlements Quotes as of 2:13 p.m.
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