MARKET UPDATE

Futures Prices Close

Overview

Grains finally see some life led by wheat.

Looks like mostly a relief bounce and fund repositioning going into tomorrow’s USDA report.

CPI data came in at 3.0%, lower than the expected 3.1%. So this helped pressure the dollar and was a small friendly boost to the grains.

Currently the weather looks ideal for most of the corn belt, as it is expected to dry out the next 10 days following the timely rains that the hurricane brought to the eastern corn belt.

Kansas and Nebraska however are expected to be very hot and very dry with temps +100 and little rain.

These recent rains were very timely for the crops. Potential for that typical weather scare rally is pretty much gone as we get into mid-July.

Yes, soybeans are made in August, but they typically do not react to weather in August like corn does in the summer months. The outlook for late July into early August also offers rain currently.

The market will start trading less and less weather from here on out unless something crazy happens.

Look at the received rain vs the areas that needed rain and you can see just how timely they were.

Rain Past 3 Days vs Drought Monitor

Rain Forecasts

Temp Forecasts

Temps are supposed to heat up until Monday, especially in areas such as Nebraska and Kansas.

Then come Wednesday they are suppose to cool down.

USDA Estimates & Preview

USDA tomorrow.

This will include the updated new crop balance sheets that include the data from the June acres report. So it will include the sharp increase in corn acres and slight cut to bean acres.

Yield is expected to be virtually unchanged. It is very unlikely that they make yield adjustments lower this early, especially given the good weather a large portion of the corn belt has seen.

They are looking for corn production to be higher than last month. This is because they are using the new planted acres that are higher.

Soybean production is expected to be a little lower due to the lower acres.

Old crop carryout is expected to see a slight increase because June stocks were higher than expected.

New crop carryout is also expected to be higher.

They will add bushels to corn production. However, they will probably offset this with something on the demand side of the balance sheet.

This is actually an instance where the USDA will do probably something that helps the balance sheet not look as bearish as it could.

World carryout is expected to see a slight increase in corn, with slight decreases to beans & wheat.

Wheat production is expected to see slight increases across the board.

The trade is expecting small cuts across the board for South America crops.

That includes the Brazil corn crop, however CONAB actually raised their Brazil corn number this morning. Keep in mind, the USDA's number is still far larger than CONAB though.

CONAB Today vs Last Month vs USDA Est. (MT)

Brazil Corn:
- CONAB Today: 115.86 (+1.7)
- CONAB Last Month 114.15
- USDA Estimates: 121.3
Brazil Beans:
- CONAB Today: 147.38
- CONAB Last Month: 147.35
- USDA Estimates: 151.75

The Funds

We already know the funds are record short. Holding -350k contracts of corn.

This is the shortest they have gone into this report since 2020 for corn, shortest since 2018 for beans, shortest since 2016 for wheat.

This is the……..

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IN TODAYS UPDATE

The funds
Could USDA raise to 183?
What has this report done in the past? Is it a market mover?
Historical performance of this report
Most interesting thing about corn
Is corn competitive globally?
We need demand
Will China start buying?
Who should get puts before report
Has wheat found a bottom?
Breakdown for each grain

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Check Out Past Updates

7/10/24

USDA TOMORROW