6/24/2022
Malorie Anderson, Grain Marketing Specialist
June 24th Agtegra Morning Market Insight

Corn: up 4
Better weather, technical indicators and global recession concerns have had the MM funds leaving the market. This morning’s report for weekly export sales came in at 26.5 mbu compared to the expected 12-24 mbu.  Be prepared for the USDA stocks/acreage report come June 30^th. With the first look at implied feed/residual and acres, it could be a wild one. The United States economy feels like it is sliding into a recession, just waiting to see confirming economic data. Market was expecting a decrease in production and slight draw on ethanol on today’s EIA weekly supply and demand report, but the report was delayed due to system issues. It could be next week before we see those numbers. Biden’s fuel tax holiday proposal did not get much support. Safrinha corn is 1% harvested as of last week in the state of Parana. Early yields are less than expected in western and southern parts of the state due to heavy infestation of leafhoppers.

Beans: up 10
Weather concerns of hot and dry forecasts have now turned into weather opportunities as it turned cooler with chances of rain. Weekly export sales came in within the expected trade range. Bearish fundamentals and weaker energy values helped push the trade lower yesterday. July and November futures saw additional sales once they each traded below their 100 day moving averages. Bean oil settled lower for the 10^th consecutive session and at its 4-month low. Canola oil has also broken hard recently and was at its 7-month low. Palm bounced off its 6-month low and finished yesterday over 5% higher. News from China stated that their meal inventories have tripled over the last three months as new bean imports have arrived while livestock margins remain weak. Chinese bean futures had their biggest daily decline since February of 2013. Talk of Canola acres are expected to be down in Canada, but Australia is expecting their acres to grow by 10% this year.

Wheat: KC up 12, MNPLS up 8
Lacking Chinese demand overall has helped ease global tightness. Early SRW harvest in Southern IL has been positive for both yield and quality. HRW harvest has continued to underperform yield expectations into KS though rains slowed harvest the past two days. This morning’s weekly export sales came in higher than the trade estimate at 17.6 mbu. Buenos Aires Grain Exchange pegged Argentina wheat at 26% good/excellent. Although this is only a point lower than last week, it is considerably lower than the 55% it was a year ago as dryness persists across all key production areas.  Ukrainian grain production expectations seem to be trending higher but with headline like “Ukraine Must Accept Every Single One of Our Demands Before Peace – Russia,” how much hope can one have of grain flowing out of Odessa. We have seen a pickup in North African demand. Saudi Arabia announced a snap tender for milling hard wheat. Will the US have a chance given the high cost of getting boats into Russian Black Sea ports, the strong Russian currency and with President Biden heading to Saudi Kingdom later this summer?