TFM Midday Update 6-30-2023

CORN

It is estimated that 70% of the US corn crop remains in drought. This is up from last week at 64%.
The storm system yesterday brought reports of hail and wind damage in several areas of the Midwest. The National Weather Service is officially calling this a derecho due to the strength of the winds over a widespread area.
The seven-day forecast continues to show rain for a large part of the corn belt, including some of the driest areas that received rain yesterday.
After the recent downtrend, corn futures are now at or near oversold levels on daily stochastics.
According to CONAB, Brazil’s government is ready to buy 500,000 mt of corn in an effort to rebuild food stocks.

It is estimated that 63% of the US soybean crop is in drought. This is up from 57% last week.
Private exporters reported sales of 132,000 mt of soybeans for delivery to China during the 23/24 marketing year.
Soybean oil is more than 2 cents higher this morning, which may be fueled by a higher palm oil market. This in turn may be offering support to soybean futures which currently show double-digit gains for the day.
After today’s Stock and Acreage reports, the next USDA report will be the WASDE on July 12. Due to worsening crop conditions for soybeans (and corn), there is a good chance they will lower yields at that time. The big question is whether or not that will be enough to offset poor export demand, with commitments to date behind the USDA’s goal.
Argentina’s soybean harvest is now complete, and yields are said to be 45% behind the 5-year average, according to the Buenos Aires Grain Exchange.

KC wheat is leading the US wheat complex higher this morning. Paris milling wheat futures are also higher for the second day in a row – France reported another decline in their crop condition to 81% good to excellent.
South Korean flour mills are reported to have purchased 50,000 mt of US wheat overnight.
Chicago wheat futures have downward momentum on both daily stochastics and the RSI. However, December Chicago wheat may be finding support near the 21-day moving average, which today is at 6.90-3/4.
Not only is today a report day, but it is also month and quarter end. This could result in position squaring and increased volatility. The upcoming shortened Independence Day holiday week could have a similar result, especially if the weather forecast has any major changes this weekend.
Russia’s foreign minister, Sergei Lavrov, told reporters that he sees no arguments to extend the Black Sea Grain Initiative. The current deal is set to expire on July 18.

Brandon Doherty