Ag Market View for Aug 15.23


The soybean complex was mixed with beans down $.15 – $.30, meal was $6 – $12 lower, while oil was up 60 – 85.  Spot Sept-23 soybeans have plunged to a 7 week low.  Next support is the 100 day MA at $13.14.  Nov-23 soybeans had an outside day down, however held above $13.  Good support rests between $12.82 – $12.90.  Oct-23 meal plunged to its lowest level since late June with next support at $376.40.  Oct-23 oil reached a 2 week high.  Following several weaker than expected economic figures, China’s Central Bank cut key lending rates hoping to stimulate a sputtering economy following months of Covid lockdowns.  Crop ratings improved 5% to 59% G/E, well above expectations.  The CC index jumped to a 2 month high, while matching the historical average for mid-Aug.  15 of the 18 states saw improved ratings.  My model suggests an average yield of 51.8 bpa and production at 4.286 bil. bu., well above Friday’s USDA forecast of 4.205 bil.  78% of the crop is setting pods, slightly above YA and historical average.  No export announcements today.  NOPA crush for July-23 at 173.3 mil. bu. was above the average trade guess, however withing the wide range of est.  This figure implies total crush of 183 mil. bu., just below the record for July of 185 mil. in 2020.  With 1 month left in the 2022/23 MY census crush has reached 2.041 bil. lbs. up less than 1% from YA.  In order to reach the current USDA crush forecast of 2.220 bil. bu. crush in Aug-23 will need to reach 179 mil. bu. just above the previous record of 177 mil. in 2019.  Oil stocks fell to 1.527 bil. lbs. well below the range of guesses and down 163 mil. lbs. from June-23.  Implied soybean oil usage was record large for any month. Spot board crush margins jumped $.14 today to $2.90 bu., with oil product value jumping 1% to 45%. 



Prices closed $.08 – $.10 lower as Dec-23 violated support at last month’s low of $4.81, trading to its lowest level since Oct-21.  Next support is $4.62 ½.  Good rains fell in the past 24 hours across the Great Lakes region and much of the eastern corn belt.  Once this system pulls thru, little to no rain is expected over the next week to 10 days as temperatures are expected to soar to triple digit levels as far north as SD and western IA by the weekend.  The 2nd half of Aug. is shaping up to be a stressful period for late maturing corn and soybean crops.  Crop ratings improved 2% to 59% G/E, slightly better than expectations.  The CC index jumped to its best level in 2 months, while nearly reaching the historical average for mid-Aug.  12 states saw ratings improved, while 6 declined.  Current conditions suggest production and average yield in line with Friday’s USDA est. of 15.111 bil. bu. and yield of 175.1 bpa.  65% of the crop is in the dough stage, while 18% of the crop is dented, matching the 5-year Ave.  Ukraine’s Ag. Ministry estimates their corn exports since July 1st thru Aug. 14th have reached 1.5 mmt, down 16% from YA.  They went on to state that if they are successful in expanding ag. export capacity outside of the Black Sea perimeter to 48 mmt annually (4 mmt month) this would include roughly 22 mmt of corn.  While this would be down from 28 mmt exported YA, it would be above the current USDA forecast of 19.5 mmt.  Global stock/use among the top 4 corn exporters are expected to climb for the 3rd consecutive year to just under 12%, a 5 year high.   Farmers will likely be clearing bin space thru month-end in preparation for the upcoming harvest.         


Prices were down roughly $.13 – $.19 across all 3 classes today.  Spot Chicago dipped below $6.00 for the first time in 2 months on the weekly chart.  Next support for Sept-23 CGO is $5.73 ¼.  Spot KC fell to its lowest level since Oct-21.  Next support for Sept-23 KC is $7.16.  Winter wheat harvest has advanced to 92% complete.  MGEX Dec-23 fell to a fresh 2 month low, however held above support at $8.00.  Spring wheat ratings improved 1% to 42% G/E, in line with expectations.  Despite the improvement the CC index is still below YA and the 5-year Ave.  My models suggest production at 458 mil. bu., slightly above Friday’s USDA est. of 450 mil.  SovEcon estimates Russian exports reached 1.2 mmt in the week ended Aug. 10th, a 2 year high.  UAE agribusiness Al Dahra and Abu Dhabi export office announced they have signed a $500 mil. agreement to supply Egypt with wheat at competitive prices over a 5 year period.  Ukraine’s Ag. Ministries goal is to expand wheat export capacity outside the Black Sea to 15 mmt, well above the current USDA forecast of 10.5 mmt.  As stocks/use among the world’s largest wheat exports fell to the lowest levels in over a decade it seems to me there just isn’t enough war premium in the market. 

See more market commentary here.

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