Ag Market View for July 26.23


The soybean complex closed mixed in a very choppy 2 sided trading session.  Beans were up $.20 – $.30 in nearby futures with deferred contracts steady to $.02 lower.  Meal was $2 – $11 higher with nearby futures leading the way.  Oil was down 100 – 230.  Aug-23 beans surged to a new contract high of $15.58 before backing off.  A new 4 month high for Aug-23 meal, next resistance is Mch-23 high at $472.  Spot board crush margins slid $.32 today to $2.49 bu. while soybean meal gained 1.3% of product value to 56.9%.  The USDA announced the sale of 272k tons (10 mil. bu.) of new crop soybeans to an unknown buyer, along with a 229k tons sale (8 mil. bu.) of new crop soybeans in a private sale to an unknown buyer.  Soybean exports from Brazil are expected to reach 9.1 mmt in July, up from the previous est. of 8.8 mmt, and would be a 3 year high for the month.  China’s sow herd grew nearly 1% in June to nearly 43 mil.  This was the first MOM gain so far in 2023.  The total hog inventory at the end of June was 435.2 mil., up 1.1% YOY.  Export sales tomorrow are expected to range from 12 – 40 mil. bu. for soybeans, 100 – 400k tons meal, and 0 – 10k tons of oil.  US biodiesel and renewable diesel production fell 10 mil. gal. in April-23 to 353 mil.  In the first 4 months of the year cumulative prod. however is up 37% from YA.  Renewable diesel prod. was a record at 201 mil. gallons, increasing by only 2 mil. 

River barge


Prices were down $.15 – $.18 despite the highest ethanol production figure since Oct-21.  A fairly wide path of 1.5 – 3” rainfall totals sweep across MN from west to east into western WI in the past 24 hours.  This same line of storms has brought some beneficial rains into central and southern WI along with northern IL thru midday.  The best prospects for meaningful rain in the next 5-7 days remain confined to the NE 20 – 30% of the corn and soybean belt.  Much above normal temperatures are expected to linger across the southern plains and Midwest into the middle part of next week.  Dec-23 was able to hold support above its 100 day MA at $5.43.  Ethanol production surged last week to 1,094 tbd, up from 1,070 the previous week and well above expectations.  Corn usage reached 110 mil. bu., or 15.66 mil. bu. per day.  If this pace held the remaining 6 weeks in the 2022/23 MY corn usage would exceed the current USDA forecast by nearly 25 mil. bu.  Despite production being much higher than expected overall stocks held steady at 23.2 mb, just below the 23.2 mb from YA.  Implied gasoline demand last week increased 1% to 8.94 mil. barrels per day, however this was 3.3% below YA.  Brazilian corn exports are expected to reach a record high 6.4 mmt in July.  Export sales tomorrow are expected to reach 18 – 36 mil. bu.  Buying seems to quickly dry up this week when Dec-23 traded above $5.70.  IMO we’d need yields to fall to the 165 – 168 bpa range in order to support prices up to $5.75 – $6.00.  Best guess right now we are trading a yield just above 170.  Recent improved demand for ethanol production still being more than offset by the need for lower old crop exports. 


Prices were sharply lower across all 3 classes with MGEX down $.32 – $.36, Chicago down $.34 – $.40, while KC plunged $.42 – $.48.  Next support for Chicago Dec-23 is Fri. low of $7.14.  Support for KC Dec-23 comes in at $8.49.  Increased optimism that Ukrainian agricultural products may be transported via rail west to the Adriatic Sea or north to the Baltic Sea provided the bearish news.  While precise volume estimates are still a best guess, Ukrainian ag. goods would at least be able to enter the global marketplace, albeit at a higher cost.  Fears that Russian exports may be disrupted due to retaliatory strikes from Ukraine have eased a bit.  A tour of hard red spring wheat fields in east central ND forecast an average yield of 48.1 bpa, just below YA est. of 48.9 bpa, however well above the historical average of 40.2 bpa.  The tour will cover the rest of the state the next 2 days with their final yield est. on Thursday.  Agritel forecasts French soft wheat production at 34.8 mmt, up 3.3% over YA.

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