The soybean complex was sharply higher with soybeans up $.20 – $.30, soybean meal $4 – $8 higher, while soybean oil was up 125 – 165. Agricultural commodities were quick to reinject weather premium back into prices. Markets did close off their highs as the midday GFS model added precipitation in the Ohio Valley for the middle part of next week however confidence is low. Other models continue to forecast mostly hot/dry conditions over the nation’s midsection over the next week to 10 days. July-23 soybeans have rebounded right back into the range it has been in for much of the past 2 weeks, $13.05 – $13.45. Brazil estimates their exports in May-23 reached 15.6 mmt, up from 14.3 mmt the previous month, and well above the 10.6 mmt exported in May-22. Census soybean crush in April-23 reached 187 mil. bu. above expectations of 185 mil. and above the range of est. In the first 8 months of the Sept-22 thru Aug-23 MY cumulative crush has reached 1.494 bil. bu. up .1% from YA, vs. the USDA forecast of up .7%. This also represents a record high crush figure for the month of April. In order to reach the current USDA usage est. of 2.220 bil. bu. cumulative crush May thru Aug. will need to reach a record 726 mil. bu., just above the previous record of 717 mil. in 2020. With the higher than expected crush, soybean oil stocks grew to a 14 month high at 2.540 bil. lbs., at the upper end of expectations. Export sales tomorrow are expected to range from 5 – 25 mil. bu. for soybeans, 150 – 550k soybean meal, and 0 – 10k soybean oil.
Prices were mixed with spot July closing $.01 ½ lower, while deferred contracts were $.08 – $.09 higher. As expected the weekly drought monitor did show a deepening of drought conditions in much of Missouri and Central IL. In addition abnormally dry conditions have also emerged across much of the eastern corn belt. Last month’s high at $5.37 also put a lid on the Dec-23 surge. The Ukraine Grain Union estimates this year’s corn crop at 23.2 mmt, down from 27 mmt YA however above the USDA est. of 22 mmt. Weekly ethanol production rebounded to 1,004 tbd last week, above the 983 tbd the previous week, however is still below the pace needed to reach the current USDA usage forecast of 5.250 bil. bu. There was 101 mil. bu. of corn used in the production process or 14.37 mil. bu. per day. In the MY to date there has been 3.774 bil. bu. used, or 14.1 mbd, an annualized pace of 5.140 bil. This afternoon’s monthly census data showed there was 416 mil. bu. of corn used in April-23 for ethanol production bringing YTD consumption to 3.40 bil. bu., down 4.5% from YA, vs. the USDA forecast of down only 1.4%. In order to reach the USDA forecast usage May thru Aug will need to reach 1.850 bil. bu. a 5% increase over YA. Export sales tomorrow are expected to range from -5 – 25 mil. bu.
Prices were higher across all 3 classes with Chicago leading the way up $.16 – $.18, KC up $.12 – $.13, while MGEX was $.08 – $.09 higher. Resistance for KC July-23 not until $8.33 where the 50 and 100 day MA’s converge. Resistance for Chicago July-23 at last week’s high of $6.24 ½. US winter wheat areas in drought slipped 1% LW to 46%, matching its lowest level since July-22. The percentage of the crop in extreme drought slipped 2% to 12%, its lowest level since Sept-22. Look for the drought intensity to continue to erode with continued rains. Too much rain may start to delay harvest efforts and raise quality concerns. The Ukraine Grain Union estimates this year’s wheat crop at 17.9 mmt, down from 21 mmt YA however above the USDA est. of 16.5 mmt. The BSGI has been closed once again as Russia has blocked incoming ships to Ukrainian ports claiming the corridor is being used by Ukraine to attack its coast. Saudi Arabia has issued a tender for 480k of milling wheat for Sept/Oct delivery. The tender closes tomorrow. Export sales tomorrow expected to range from 6 – 16 mil. bu.
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