Welcome back to the D&D AG MarketMIX newsletter! This newsletter is exclusively for you - our D&D customers and associates. Our goal is to provide you with a monthly summary of the Ag market reports to keep you updated on relevant, vital news that may impact your business.

While drought conditions early in the growing season are weighing on yields, reduced demand and improved weather could help limit price rallies in the grain markets.

In its latest World Agricultural Supply and Demand Estimates (WASDE) report, USDA lowered US corn yield forecasts to 175.1 bushels per acre, down from 177.5 bpa in July and just below consensus calls for 175.5 bpa. Soybean yield estimates were also adjusted downward to 50.9 bpa, compared to 52.0 in July, and under average pre-report forecasts of 51.3 bpa.

At the same time, demand for US grain remains lethargic. Export estimates for the 2022-23 crop year were lowered for the fourth month in a row, and USDA reduced food and industrial demand by 25 million bushels. The demand side of the soybean balance sheet was relatively unchanged. Weekly export sales are stirring up some optimism, but sales remain below USDA projections.

Economic trouble in China could also dent export opportunities in the months ahead. The country’s youth unemployment is at record highs, and its housing market is under strain as consumers pull back on spending. Analysts also say China is on the edge of deflation, which could pull its economy down further.

Meanwhile, despite a recent credit downgrade, the US Dollar is gaining strength against competitor currencies, making it more expensive for international buyers looking to pick up US commodities.

Ahead of harvest, eyes will remain on weather conditions. Key-growing regions have received much-needed rainfall, easing drought conditions. Still, temperatures remain high, with several weeks of summer ahead.

South American weather also remains a watch factor as El Niño conditions set in. The pattern typically brings wetter weather to the continent and could bring much-needed relief to a parched Argentina.

Amid uncertainty in grain and feed markets, milk markets are improving. Still, higher input costs are keeping pressure on dairy producers. According to USDA’s Dairy Margin Coverage program, on-farm margins in June reached the lowest level since 2012. Profits could remain tight in July, though some estimates call for relief later in the year.

This monthly report is brought to you by Ever.Ag’s Feed Foundations Team. The risk of loss trading commodity futures and options can be substantial. Investors should carefully consider the inherent risks in light of their financial condition. The information contained herein has been obtained from sources to be reliable, however, no independent verification has been made. By law we must state the information contained herein is strictly the opinion of its author and not necessarily of Ever.Ag and is intended to be a solicitation. Past performance is not indicative of future results.

We appreciate and thank our sponsor partner in this report – CHR HANSEN

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