Corn is slightly lower at midday in relatively quiet trade. The deferred months are losing more than the front months, and both July and December corn are near support around their 100-day moving averages. Planting progress has shown that the US is on pace with the 5-year average which is pressuring prices.
According to Reuters, little to no ethanol will qualify for the US sustainable fuel aviation subsidies. Export demand has already been sluggish, but there was optimism over the prospect of increased domestic demand.
Weather was wet last week, and there are more systems forecast to run through the Midwest next week as well. It will be important to watch the planting conditions for the crop yet to be planted, and the first look at crop conditions that will be released next week.
Soybeans have traded either side of unchanged today but are currently trading mixed, despite lower soybean meal and soybean oil. Planting pace is now at 68% for soybeans, which is 5 points above the 5-year average.
Next month on the 12th, the USDA will release its WASDE report, and if exports don’t pick up significantly, yearly exports are expected to be cut by between 20 and 30 million bushels. So far, China has purchased no new crop US soybeans, and new crop sales are the lowest in 18 years.
According to Morgan Stanley, soybean losses in the flood plagued state of Rio Grande do Sul have apparently reached 5 mmt, and they are estimating total production at 145 mmt, well below the USDA’s guess.
All three wheat classes are trading lower today with Chicago wheat leading the way lower. This may partially be a technical move after the wheat complex became overbought, scoring a new highs for the year on Tuesday in all three classes. Wheat conditions in the US are significantly better than last year, but the market is likely focusing on the condition of Russia’s crop.
The EU has agreed to increase the tariffs on Russian grain imports in order to lessen Russia’s revenues as well as to keep cheap Russian grain from lowering prices too much domestically.
In Russia, there are slight chances for scattered showers this week, but the recent dryness and frost has taken a toll on the wheat crop. Consultancy group IKAR along with SovEcon have both cut their production estimates between 78 and 80 mmt which compares to their earlier estimates of 93 mmt.
Grain Market Insider is provided by Stewart-Peterson Inc., a publishing company.
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