Afternoon report: Multiple factors affect crops today leaving corn barely positive, with beans and wheat negative for the day.
Note: Guest commentary provided by Cat Sullivan, ag risk management advisor for Advance Trading, Inc.
Highlights
Comment of the day on Black Sea grain shipping deal . . . “the key in all of this is Russian President Vladimir Putin and his track record on commitments at this point is far from stellar”.
Weather
Corn Belt rain amounts through Wednesday are expected to range from 1/3 to 2 inches of rain in 65% of the region with 2 1/2 to 3 inches possible; far western areas will be the driest. Temperatures are forecast to be near to slightly above normal. The Southeast is forecast to receive 3/4 to 2 1/2 during the period with a few amounts of three to four inches. Temperatures are forecast to be near to slightly below normal. The US Delta is forecast to receive 1/10 to 3/4 of an inch with 1-3 inches possible, especially in the south. Temperatures are forecast to be near normal. 35% of the HRW area might receive 1/10 to 3/4 of an inch of rain as temperatures average above normal. Mostly above normal temps in the Canadian Prairies during the period with perhaps 75% of the region receiving 1/3rd to 2 inches.
Corn
Corn traded in a near-20 cent range as the market debates rain potential. September corn settled at $6.05, up 5 cents on the day.
Export Sales were released this morning revealing a positive old crop number of 2.3 mbu (-4 to +12 expected) with Japan (5) and Mexico (2) the top buyers. 13.7 mbu sold for 22-23 delivery, which was near the upper end of the 4-16 range.
Export Sales for Milo revealed 3.1 mbu switched from Unknown to China. At the same time, Mexico canceled 90 K. The net is a 100 K reduction in 21-22 sales versus a 2 per week need. Unfortunately, new crop export interest continues to be lacking.
One positive note for exports from today, a 75 K vessel of corn fixed from the PNW, loading Aug. 10-15, is destined for China.
In world news, an official of China’s General Administration of Customs (CGAC) says the country will sign quarantine agreements for the importation of Brazilian corn. The goal is to, “facilitate imports and diversify import sources.” Brazil farmer group Abramilho thinks exports to China may begin before the end of the year. To add fuel to the fire, DERAL puts Parana Brazil’s Safrinha harvest at 20% complete, versus just 3% a year ago at this time. And ANEC raised its estimate of Brazil’s July corn exports from 5.3 to 6.2 million, which is double the 2021 July total.
Argentina producers began a one-day halt to product sales yesterday, for what it’s worth. Ukraine infrastructure ministry reports the re-opening of the Bystre Canal with access to Reni, Izmail and Kilia ports since Monday has allowed 16 vessels to pass. The opening should boost the country’s monthly grain export capabilities by 1/2 MMT. South Korea’s KFA booked 68 K of South American corn for October 20th arrival.
Soybeans
Early weakness ensued due to sub-par soy complex export sales and falling crude prices. Corn worries brought beans back for a time. August Soybeans later closed at 14.71 3/4 , down 13 cents on the day.
This morning’s soybean Export Sales revealed buyers canceled 13.3 21-22 beans last week (-7 to +7 expected). The total includes Unknown canceling 13.5 mbu; China canceled 4.8; and Egypt canceled 2.5 mbu. The European Union bought more than 5 mbu. New crop interest was light with a total of 4.2 purchased (4-11 expected) with China booking 3.3 mbu of the total.
Product Export Sales revealed an ugly 21-22 soybean meal sale of just 8.2 K (50-300 expected, 83 K needed). A much better 22-23 number at 146 K was surprising with the trade in the 0-50 range. Soybean oil sales were low at just 1 K in 21-22, and zero for 22-23.
China imported only 254 K MT of edible oils in June, more than a 7-year monthly low. This month’s total was off 20% from May and down a not-so-insignificant 75% versus the prior year of the same month. This may have a positive impact on soybean imports/crush if the oil supplies need to be replenished. China is also noted to have booked several soybean vessels for late July-early August loading from Brazil. In other world news, Indonesia will likely cut its export levy on palm oil exports for two months in order to entice more export sales. Also, ANEC lifts the July Brazil soybean export forecast up from 6.5 MMT to 7.9 which is virtually unchanged from July 2021. ANEC also sees July soybean meal exports up 24% from last year, estimating 2.1 MMT (1.9 LW) versus 1.7 in 2021.
Wheat
Today was a volatile day of trading with a possible Black Sea shipping agreement causing unwanted pressure. Export sales were very strong for HRW, SRW and White wheat as China showed up to make some key purchases this week. September Chicago Wheat closed at 7.95, down 15 3/4 cents on the day.
Export Sales totals for week ended 07.07.22 finally reported something to talk about! It was a very solid sale number at 37.4 million bushels, which was well above the 7-18 mbu trade range. The total included 9.7 mbu to China, including 5.0 SRW, 2.4 HRS and 2.6 White. Brazil bought 1 mbu. Sales by Class totaled 8.9 mbu this week (4.2 last week) for HRW; HRS totaled 8.6 (3.9); SRW reported 7.8 (1.7); White, 11.1 (1.1); and Durum, 1.1 (-37 K).
Potential evidence arose today of progress on the Black Sea export deal. A 35 K Handysize vessel was booked to load wheat from August 1-5 with Italy being the destination.
Russia continues to export wheat to non-NATO countries. Nearly 735 K of wheat shipped from its deep-sea ports in the week ending July 13th with destinations including Turkey, Iran, Libya, Egypt, Saudi Arabia, Algeria and Italy. Another 881 K is scheduled for departure by the end of the month. This was actually double the total from the approximate same period last year.
Argentina’s Rosario Grain Exchange cut its estimates of domestic wheat harvest to 17.7 million tonnes from 18.5 million previously, mainly due to a reduction of the wheat planted area now seen at 5.9 million hectares.
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CBOT Quotes as of 2:00 p.m.
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