US farm markets spilled lower on Wednesday.
Corn prices dropped 3.69%.
Soybean prices faded 1.85%.
The rest of the soy complex was also in the red, as soyoil closed with 0.45% losses, and soymeal lost 1.27%.
Wheat losses were variable, as Chicago SRW tumbled 4.20%, Kansas City HRW fell 1.71%, and MGEX HRS dropped 1.22%.
USDA released its latest WASDE report yesterday, offering up generally unfavorable data for traders to digest.
The reaction overall bearish primarily based on US corn yield estimate at 177.5 bushels per acre (bu/ac) whereas the trade was looking for 176.5bu/ac.
On wheat, US 2023/24 production was forecast 47.3Mt, 1.5Mt above expectations and 2Mt above the June report.
The winter wheat production is seen up 6 % from June forecast.
Hard Red Winter production is up 10 percent from last month.
Soft Red Winter is up 5 percent from the June forecast.
White Winter was down 1 percent from last month.
Durum wheat production was forecast, down 16 percent from 2022.
Other spring wheat production, was forecast, down 1 percent from last year.
The increase came from both from acres (+600k) and yield (+1.2bpa).
Feed use was increased 20 million bushels (Mbu) which saw ending stocks increased up 30Mbu.
On corn, the decreased yield along with last week’s additional 2 million acres (Mac) saw production up 55Mbu from the June report.
Ending stocks were up 5Mbu at 2.262Mbu, use unchanged.
Soybean yield was left unchanged at 52bpa however when coupled with the 4Mac lost last week in the June planting report, production was down 210Mbu.
This was offset with lower crush (-10Mbu) and lower exports (-125Mbu) to see ending stocks down 50Mbu, but 100Mbu above trade expectations.
Globally, 23/24 corn production was up 1.7Mt from the June report with increases in US and Ukraine offset by a reduction in the EU.
World wheat production was forecast down 3.5Mt the increase in the US offset by reductions in Argentina (-2Mt), Canada (-2Mt) and the EU (-2.5Mt).
Australian forecast was left unchanged at 29Mt.
Soybean world production was down 5.4Mt, reflecting the US losses and saw a tightening of global ending stocks by 4.2Mt.
As a result, 2022/2023 world wheat ending stock rose by +2.65 Mt to 269.31 Mt.
2023/2024 world wheat ending stock was seen with a downward revision of by -4.18 Mt to 266.53 Mt.
2022/2023 world corn ending stock declined by -1.25 Mt to 296.30 Mt, but 2023/2024 was revised up by +0.22 Mt to 314.12 Mt
As for soya 2022/2023 world ending stock increased by +1. 58 Mt to 102.90 Mt, while 2023/2024 ending stock was revised down by -2.36 Mt to 120.98 Mt.
As for cash average prices USDA left the cash average corn prices at $6.60 and $4.80 in the July WASDE.
USDA left the old crop soybean cash average price at $14.20, but raised the new crop price estimate by 30 cents to $12.40.
The meal cash price was set at $375/ton and bean oil at 60 c/lb.
As for wheat the cash average price fell by 20 cents from the June WASDE to $7.50.
Meantime, weekly EIA data showed a 28k bpd loss in ethanol output vs last week as producers averaged 1.032m barrels per day through the week that ended 7/7.
Ethanol stocks were 398k barrels looser at 22.658 million.
Private exporters announced the sale of 105,000 metric tons of soymeal for delivery to unknown destinations during the 2023/24 marketing year.
In this context, corn basis bids were mostly steady to firm, after rising 5 to 20 cents higher across four Midwestern locations.
An Illinois ethanol plant bucked the overall trend after sinking 8 cents lower.
Soybean basis bids were steady to soft after dropping 5 to 30 cents across half a dozen Midwestern locations.
Commodity funds were net sellers of CBOT corn, soybean, wheat, soymeal and soyoil futures contracts.
On this morning, Chicago corn prices lost more ground, with the market dropping to its lowest since early 2021.
Wheat prices were weaker, while soybeans rose.
Notably, the most-active corn contract on the Chicago Board of Trade (CBOT) lost 0.3% to $4.82-1/2 a bushel, as of 02:40 GMT, after dropping earlier in the session to lowest since January 2021 at $4.81 a bushel.
Wheat fell more than 1% to $6.26-1/4 a bushel after hitting its lowest since June at $6.22 a bushel and soybeans added 0.9% to $13.39-1/4 a bushel.
Brazilian farmers will reap an estimated 317.5 million metric tons of grains this season.
Conab, the government’s food supply and statistics agency, on Thursday indeed raised its second-corn production estimate to 98 million metric tons from 96.3 million in June.
Meantime, Brazil’s Anec estimates that the country will export 10.45 MMT of soybeans this month.
That would be a year-over-year increase of more than 49%, if realized.
Anec also anticipates Brazilian soymeal exports will reach 2.5 million metric tons in July.
In Argentina, the Rosario grains exchange cut its forecast for Argentina’s ongoing wheat harvest by about 4%, compared to a prior crop estimate, according to a report issued on Wednesday that blamed the revision on a lack of rainfall in some farming areas.
Notably, the exchange estimates that the 2023/2024 season will yield 15.6 million metric tons, down from its prior forecast of 16.2 million metric tons.
It added that the estimate for the 2023/2024 wheat planting area has been cut by 200,000 hectares, to total 5.4 million hectares.
It noted that the cut would have been greater if there was no recent rainfall.
In its monthly report, the exchange also projected the recently completed 2022/2023 soybean harvest – Argentina’s top cash crop – at 20 million metric tons, down about 2% from the 20.5 million tons previously expected.
The exchange also maintained its 2022/2023 corn harvest estimate at 32 million metric tons, with 60% of the farming area for the grain planted so far.
In Europe, grain markets were mixed, with wheat declining sharply following FranceAgriMer and USDA reports, while corn only managed to hold marginal gains in the front month.
Rapeseed extended its gains on the heels of canola and other oils higher.
In France, as we said yesterday, the first results for the 2023/2024 campaign have been published by FranceAgriMer on winter crops.
In soft wheat, the office took the Agreste production figure to 35 Mt.
A modest increase in domestic consumption of +0.2 Mt to 14.52 Mt is expected.
On the export side, sales to the European Union are expected at 7.79 Mt and up by +1.4 Mt over 1 year.
On the other hand, exports to third countries would fall by -0.5 Mt to 9.6 Mt.
In the end, the stock at June 30, 2024 is forecast at 2,668 Mt, down slightly from the 2,794 Mt recorded at June 30, 2023.
Unlike wheat, an increase in barley stock of +0.35 Mt to 1.53 Mt is expected on June 30, 2024.
While production is posted at 11.94 Mt, up +0.52 Mt over one year , the +0.57 Mt increase in exports to the EU does not offset an expected decline of -0.7 Mt in third country exports to 2.5 Mt, ie a 5-year low.
Finally, in durum wheat, a historically low stock of only 70,000 t is expected at the end of the 2023/2024 campaign by FranceAgriMer.
Meantime, Germany’s 2023 wheat harvest will fall 3.2% on the year to 21.79 million metric tons, the country’s association of farm cooperatives said on Thursday.
This was down from its previous forecast in June of a German 2023 wheat crop of all types of 21.87 million metric tons.
In its latest harvest estimate, the association forecast Germany’s 2023 winter rapeseed crop will fall 3.3% on the year to around 4.14 million metric tons, unchanged from the June estimate.
Germany’s winter barley crop, mostly for animal feed, will be 1.1% lower on the year to 9.12 million metric tons, the association said.
Winter barley harvesting is well underway and is finished in some areas but with barley quality sometimes suffering from dryness stress.
The spring barley crop, used for beer and malt production, will fall 17.0% on the year, largely because of reduced sowings, to 1.63 million metric tons.
The maize crop will fall 3.0% to 3.72 million metric tons, it estimated.
Corn has benefited from the rain but a current heatwave means expectations of overall reduced grains and rapeseed crops must be maintained.
The NATO Summit has stopped short of offering Ukraine membership into the alliance however continued to pledge security guarantees.
It also backed Sweden’s NATO membership.
The has been no material news on the Black Sea Grain Deal which remains due to expire on 17 July.
U.N. Secretary-General Antonio Guterres has proposed to Russian President Vladimir Putin that he extend a deal allowing the safe Black Sea export of grain from Ukraine in return for connecting a subsidiary of Russia’s agricultural bank to the SWIFT international payment system.
China’s CASDE forecasted the 23/24 soybean production at 21.46 MMT which was unchanged from last month and 1.17 MMT higher yr/yr.
Their projected imports were marked at 94.22 MMT, also unchanged from the June report.
China imported 10.27 million metric tons of soybeans in June, up 24.5% from a year earlier, customs data showed on Thursday.
However, Chinese imports were significantly lower than the record 12.02 million tons in May.
Total soy arrivals in the first six months of the year reached 52.58 million metric tons, up 13.6% year-on-year, the General Administration of Customs data showed.
Another 10-11 million metric tons are expected to arrive this month.
Firming canola values saw some trade activity on both current and new crop yesterday as producers get greater comfort around production potential for the coming year.
Aussie values at circa A$700/t track however they still sit well below the Canadian $A equivalent at A$800/t.
Wheat and barley values were more or less unchanged taking greater lead from European pricing.
Meantime, the 8-day BOM forecast shows only 5mm of rain across much of the southern cropping belts which may provide opportunity for producers to get paddock access for long overdue herbicide and fertiliser applications.