Commentary
Grain futures rallied again overnight on fears that this month’s weather is taking the top off the corn, soybean, and spring wheat crops in my opinion. The two-week outlook moderated somewhat over the past 24 hours, but it still reflects a general warm pattern west of the Mississippi River, with rainfall below normal per the National Weather Service. It is my belief that the greater weather threat is for Europe’s corn crop. It has been downgraded and has traders nervous over future potential losses due to prolonged heat. The market saw export demand from Italy for over 130K metric tons in a flash sales announcement Tuesday. A rarity for them for that size or tonnage. Additional support in my view came in today from USDA’s flash sales announcement of another 7.2 million bushels of U.S. new-crop soybeans sold to China. The market saw strong gains until the last hour of trading, where profit taking potentially hit corn and soybeans. Not uncommon price action in front of a big crop report on Friday.
For the 11am report Friday from USDA, traders see 22/23 corn ending stocks near 1.402 billion bushels with a range of 1.285 to 1.485. Yield is coming at 176 bushels per acre. Range is from 173.2 to 177.6 on the high end. For soybeans, ending stocks for the 22/23 season at 230 million bushels, with a range of 175 on the low end and 320 for the high end. Traders see yield at 49.9 BPA to 52 BPA.
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