TFM Midday Update 6-16-2023

CORN

Grain markets are sharply higher again at midday as the weather forecast looks to remain mostly dry for the corn belt, and funds appear to be bailing out of short positions.
Yesterday, December corn closed above the 100 day moving average for the first time since November. Currently it is above the 200 day moving average (which is at 5.84).
There is no longer a risk of frost in Brazil (for now), and there were no widespread issues for the crop, despite the recent cold temperatures.
July corn on Brazil’s Bovespa Exchange is trading around the equivalent of $4.84 per bushel. Export values are still cheaper compared to the US.

The EPA announcement on biofuel mandates is set for next week (after being rescheduled). There is some anticipation that it will be friendly to the soybean oil market.
Weather issues in Malaysia are supporting palm oil prices, which may be offering some support to soybean oil and soybeans as well.
The most recent drought monitor map shows worsening conditions in soybean growing regions, with 51% of the crop said to be in drought (vs 39% last week).
NOPA May crush came in at 177.9 mb. This was well above the trade’s anticipated 175.8 mb and was also a record for May.

July Chicago wheat is higher for the sixth out of the past seven days. Funds remain net short and are likely exiting positions, helping wheat to rally.
Paris milling wheat futures gapped higher and are currently trading about 6-7 Euros per ton above yesterday’s close.
This week, Russian export prices were said to hit a low of $230 per metric ton vs $240 last week. At these levels, they will continue to dominate on the export front. This does go against the recent reports that their government established a floor at $240.
The Black Sea grain deal is set to expire in mid July. At this point it seems unlikely that they will extend the deal again, but traders have heard that before.

Brandon Doherty