Ag Market View for July 14.22
Soybeans ended lower on demand worries. It has been 6 weeks since USDA announced US soybean sales to China. To date, Brazil soybean export are 60 mmt vs 68 last year. Most of the drop is less China exports. China year to date soybean imports are down 8 pct. June China edible imports are down 75 pct vs ly. Most of this linked to covid lockdown and less people going out to restaurants. China pork imports are down 39 pct. Old crop US soybean export sales dropped 13 mil bu. Total commit is 2,184 vs 2,275 ly. SU tested 13.87 but lack of follow through buying sank futures down to near 13.40. Managed funds continue to liquidate out of soybean and soyoil longs. World rapeseed prices are also trading lower. There was talk that US C IL processors may have dropped basis. Same might be said about US gulf export values. US 2 week Midwest forecast calls for warm and dry SW and normal north and east.
Corn futures ended higher due to strong US,EU and South America basis. Some link this to slowdown in farmer selling. Corn is trying to bounce off recent lows on concern about EU and US SW corn crop. Some feel USDA may be too high on World supply and too low on demand. Some talk that an agreement to allow for Ukraine exports could be closer offers resistance to corn futures. The plan will need Putin approval. Plan suggest Ukraine grain escorted out of 3 Ukraine ports including minesweepers and cease fire. CU. Old crop US corn export sales were only 2 mil bu. Total commit is 2,378 vs 2,750 ly. USDA goal is 2,450 mil bu vs 2,753 ly. USDA est of US 2022/23 corn exports is 2.400. Argentina corn crop could be near 51 mmt vs BAGE est pf 49 and USDA 53. Weekly US ethanol production was down 4 pct due to short week. More concern about EU corn crop due to dryness. EU also concern about corn imports from Brazil due to more Brazil corn export to China. US 2 week Midwest forecast calls for warm and dry SW and normal north and east. Debate continues if US weather supports a 177 corn yield. There is also concern that demand for US corn exports need to increase to push futures higher.
Matif wheat futures traded in a €14 range and closed down €2-4 with the U/Z inverse at a new high. Prospects of the opening of Ukraine Black Sea ports was again the main market topic, and on balance the trade seems to believe something will be agreed next week. Some still have doubts, and even in the best case it will take months to make the necessary repairs to both interior and port infrastructure, not to mention the de-mining. Swiss attorney general warned Swiss-based traders that dealing with stolen raw materials, notably from Ukraine, could trigger charges of war crimes. Russia wheat crop is getting bigger but there is more talk of loss of protein and large quantities of feed wheat in the south EU. Higher US Dollar, lower equities and lower energy prices is offering resistance to US winter wheat futures. Better than expected US weekly wheat exports may be taking a back seat to negative money flow. Weekly US wheat export sales were an impressive 37 mil bu. Total commit is 260 vs 261 ly. This included rumored sales of white wheat to China.
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