Ag Market View for Aug 17.23


The soybean complex was mostly higher with beans up $.02 – $.10 closing near the midpoint of today’s range, meal was $2 – $5 lower, while oil jumped another 80 – 110 points.  Prices appeared to back up from midday highs as longer range models suggested better prospects for rain in the 8-10 guidance.  Nov-23 beans briefly traded above resistance at last week’s high of $13.38 before pulling back.  While crush margins were little changed today, spot oil gained nearly 1% in product value to 46%, its highest level since Nov-22.  Soybean exports at 55 mil. bu. were above expectations.  New crop sales dominated at 52 mil. bringing commitments to 389 mil. bu., while still down 38% from YA they continue to narrow the gap.  The rapid growth of renewable biodiesel should keep the trend of higher crush and lower soybean exports intact for the foreseeable future.  Meal sales were strong at 347k tons, with roughly 2/3rd being new crop.  US soybean area in drought fell another 5% to 38%, down from the June-23 peak at 63%.

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Prices closed $.03 – $.04 higher, recovering nicely from the lower trade overnight.  Near term resistance for Dec-23 is at Monday’s high of $4.92 ¼.  A fast moving system brought roughly .25” – .75” rain across the Great Lakes region today.  Once this system moves thru the Eastern corn belt this evening little to no rain is expected across the corn belt thru the end of August.  Temperatures are likely to hold at much above normal levels as well, stressing late maturing corn and soybean crops.  Today’s drought monitor continues to show drought expansion across the northern plains, while drought conditions across the Midwest continue to ease.  Look for this to reverse in upcoming weeks.   Export sales at 37 mil. bu. were in line with expectations.  New crop sales at 28 mil. bu. brought YTD commitments to 263 mil. down 24% from YA and the lowest since 2019.  APK-Inform estimates that 820k mt of Ukrainian grain was exported thru ports on the Danube river in the 1st half of August, implying a monthly rate of just over 1.6 mmt, working toward a goal of 2.5 mmt per month via this route.  The US/Mexico trade dispute over their ban of GMO corn imports has moved into its next phase as the US formally requested a trade panel settlement.  USDA Ag. Sec. Vilsack said Mexico’s GMO corn ban is not based on science and is against decades of scientific safety evidence.  Mexico’s Economic Ministry stated they will defend their governments position.  US corn area in drought slipped another 7% to 42%, well below the 70% peak in late June.  The BAGE reports Argentine corn harvest has reached 87%, down from 97% YA.  Despite the forecast and today’s higher close, the path of least resistance still appears to the downside until something disrupts to outlook for 2.2+ bil. bu. carryout.  Downside objective remains $4.50 – $4.60 basis Dec-23 


Wheat continues to be the weakest link in the ag. space with all 3 classes closing lower.  While spot Sept-23 CGO has traded below the spring low, so far Dec-23 has held above this support level which is at $6.08 ¼.  An inside day on the charts for both KC and MGEX Dec-23 contracts.  Fresh news from the Black Sea region today was limited.  The Hong Kong flagged vessel that left the Ukrainian port in Odessa yesterday has reached Romanian waters and is scheduled to arrive in Istanbul later today.  Export sales at 13 mil. bu. were in line with expectations and bring YTD commitments to 249 mil. bu., down 23% from YA, vs. the revised USDA forecast of down 8%.  Talk has resurfaced again of India making significant wheat purchases of 7 – 9 mmt in direct govt-to-govt negotiations with Russia, likely at discounted prices.  This in an effort to curb food inflation ahead of state and national elections next year.  Whole prices in India have recently hit a 7 month high.  US winter wheat areas in drought slipped another 2% to 43%, the lowest in over a year.  Look for this pattern to reverse in upcoming weeks.  Spring wheat areas in drought inched up another 2% to 54%, the highest since Mch-23.  The BAGE reported a 1% drop in wheat conditions to 20% G/E.

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