On The Money Grain Commentary 6-8-23

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Corn Outlook:

All eyes in the grains are currently focused on weather which is the norm for this time of the season. However, the geopolitical climate is heating up and could impact them as well. No sooner than the ink was dry on the Black Sea grain accord, Russia says that they see no reason for extending it when it expires in July. Also, an explosion of a key dam in Ukraine is increasing worries of farmland being flooded and destruction of grain facilities. These developments will likely keep volatility at an extreme. Meanwhile, looking at corn, planting is mostly complete with the crop rating falling 5 points last week to 64 percent in good-to-excellent condition. This compares to last year’s rating of 73 percent. Export inspections were below the previous week at 46.4 MB but are on track to reach USDA’s projection of 1.775 BB. Right now, the greatest threat possibly facing corn is the dollar seems poised for another leg higher.

Bean Outlook

Soybean planting is winding down at 91 percent complete which means weather will be in the spotlight for the next several weeks. Any signs of a hiccup with Mother Nature will lure bullish interest. However, we cannot overlook the fact that exports are bleak with inspections last week only 7.8 MB. They must average 17.4 MB on a weekly basis to reach USDA’s projection of 2.015 BB. Currently, shipments are on pace for 1.875 BB. China’s interest has turned to Brazil’s record crop, and it really shows as they have largely been absent in purchasing U.S. soybeans for the past 4 weeks. The bottom line is, without their interest, weather will have to become a factor in sustaining higher values.

Wheat Outlook:

Recent developments surrounding Russia and the Black Sea Region could give U.S. exports a boost. It could certainly be used as they are at an historic low. However, be aware that Russia has a record crop, and they will not allow anything to stand in the way of interfering with their exports. Meanwhile, winter wheat harvest is just beginning with the ratings improving 2 points last week to 36 percent of the crop in good-to-excellent condition. Dryer conditions in the upper Midwest have facilitated planting of the spring crop which is almost finished at 93 percent complete. For wheat, the greatest threat to prices gaining ground is that the dollar could be looking at another leg higher.

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