TFM Midday Update 07-20-2023

CORN

Corn is lower around midday after trading higher in the overnight in response to a new attack last night by Russia on Ukraine’s port city of Odessa. This makes the third night in a row of attacks on Odesa with 60,000 tons of grain being destroyed yesterday.
Export sales for corn were poor last week with net sales of 9.3 mb for 22/23, which was down 49% from the previous week but up 6% from the prior 4-week average. Net sales for 23/24 were 19.4 mb, and exports of 15.1 mb were down 22% from the previous week.
Brazil’s second crop corn is now seen at a record 54 mmt which would be up 16% from last season and secures Brazil’s new spot as the top corn exporter.
The new monthly weather outlook has been released by NOAA and shows below-normal temperatures and above-normal precipitation for most of the Corn Belt.

Soybeans are trading lower along with soybean meal, while soybean oil is higher with support from crude oil. Overbought futures may be adding pressure along with new weather forecasts that show better conditions over the next month and into mid-August which is a crucial time for soybeans.
Net sales of soybeans were sluggish again with 4.7 mb for 22/23, which was up 58% from the previous week but down 43% from the prior 4-week average. Net sales for 23/24 were 27.9 mb, and exports of 8.8 mb were down 29% from the previous week and 15% from the prior 4-week average.
Thanks to Brazil’s record large crop, they have been the world’s leading seller and main supplier of China, whose soy imports from Brazil for June were up 31.6% from the previous month.
The withdrawal of Russia from the grain deal has had impacts on soybean prices due to Ukraine’s exports of sunflower oil and meal, and with those exports halted, other world veg oils have moved higher. October palm oil was up 3.9% today and soybean oil is following suit.

Wheat has traded all over the place so far today with prices higher overnight on the heels of another Russian attack on Odesa, but a few hours later prices plummeted, and now have stabilized around unchanged.
Russia has said that any vessels in the Black Sea region will now be assumed to be carrying military goods, so Ukraine will need to export their grains through other routes.
Since the beginning of the Black Sea Grain Initiative on July 27, 2022, over 31.1 mmt of grains and veg oils have shipped from three Ukrainian ports to 46 countries.
Technically, December wheat may have found resistance at the 200-day moving average at 7.60 because futures slightly exceeded that level before backing off lower.

Amanda Brill