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Risk-off is how to describe today's trade. With a lack of headline news, the trade reverted back to trading on what we know about the commodities... decent U.S. supply, questionable U.S. demand, and an ever-changing geo-political climate.
Harvest pushes on, but demand continues to be questioned. Yesterday's "hand-shake" ceremony between U.S. and China has led to a sale of 126,000 tonnes of soybeans to China for the 2023/24 marketing year, but we will need much more where that came from to stay current with export expectations. Brazil and Argentina are always in the back-of-one's mind as their growing agricultural programs are pushing more and more grain to China, weakening the reliance China has on U.S. commodities. Brazil’s northern areas are showing a 1.5 to 2 inch rain deficit vs the 30 day normal but weather models are showing enough rain to cut the region most affected down by half. Argentina’s soy belt is expected to see modest rains that cover 90% of its belt in the next 5 days and then much lesser coverage (30%) in the 6-10. The soy belt is averaging a 1.5 inch deficit from the 30 day normal too. With concerns over freight with the U.S. commodities including the St. Lawrence strike, and low water levels in the Mississippi, this may be a concern for potential buyers as well.
On the corn side of things, today's EIA report showed commercial crude oil stocks up 1.4 million barrels to 421.1 million, and ethanol stocks up 0.3 million to 21.4 million. Ethanol production increased 5 thousand barrels per day to 1,040 thousand. The production of ethanol utilized an estimated 100.6 million bushels of corn last week, up from 100.1 million the previous week, but down from 103.7 million bushels last year. Marketing year to date estimated corn use for ethanol totals 702 million bushels, up 20 million or 3% from the previous year's pace.
Wheat markets continue to watch the skies. Rains that fell recently are said to have improved the conditions in Argentina, so says the Rosario Exchange. Rains fall as forecast in Western Ukraine and Russia yesterday. As we all know, rain makes grain. More Rains for the same Black Sea areas are forecasted, but they are expected to leave the southern Ukraine areas dry.
Prime Minister Benjamin Netanyahu gave a televised address saying Israel is preparing a ground invasion of Gaza. He did not give details of the ground invasion but once again said civilians should move south. Crude oil prices moved sharply higher during the speech.
With excellent weather yesterday, we saw a great day for bean harvest progress locally. Just a quick warning to our IP soybean growers. It is critical that your production NOT get contaminated with Roundup Ready soybeans. If you have been harvesting crush soybeans ahead of your IP soybean harvest, it is incumbent on you to make sure that your wagons/buggies/combines are free from any Roundup Ready bean contamination. That equipment needs to be meticulously cleaned prior to harvesting IP beans. We have caught some contamination at the scale in the past 24 hours. We do not want to reject IP soybean deliveries, but we have no choice when it comes to contamination. Please do not put your $5.00/bu IP premium in jeopardy!!!
Export sales are due out tomorrow, and funds today were thought to have been all sellers. See below.
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