The USDA Crop Report is out today at 11:00 AM.
Grain futures are lower this morning ahead of today’s June Seeding/Stocks Report at 11:00 a.m. The US dollar has rushed back to the highs of the year, while crude all breaks critical support along with metals and stock indexes all sharply lower to end the month. The S&P 500 is set to post the worst first six months of the year since 1970. During the Covid year of 2020, massive Federal Reserve and government money injections occurred in April and May that had reversed earlier losses during that season. Grain futures are also softer, with Midwest rain in the forecast in the coming week.
Egypt’s GASC purchase of 815,000 MTs of wheat was the largest single purchasing 13 years. The wheat was sourced from a combination of Romanian, Bulgarian, French, and Russian wheat for shipment from mid-August into mid-October. The average wheat purchase price was $435/MT, down $45 from their last tender on June 1. Just 170,000 MTs of Russian wheat were sold, with the remainder being from Europe. Europe has sold massive amounts of wheat to the world since last week.
The Russian wheat sold to Egypt came from wheat exporters that owned their fleets. Those that did posted an average cost to Egypt of $20.00-22.00 higher than the accepted offers. Logistically sourcing Russian wheat is not a cheaper, easy function. This puts into extreme question the prospects that Russia will export at or over 40 MMTs of wheat in the 2022/23 crop year. There is a strong consideration for many analysts that Russia will at best export 30-32 MMTs of wheat in the coming year.
Today’s USDA June Seeding will focus on the mix of corn, soybean, and spring wheat seedings data that changed since March 31. Besides the mix being tossed around, it is still anticipated that the combined corn/soybean acreage will hold in the 180-181 Mil acre range. The unknown in the question to be answered is how much of the ND/MN/Northeast SD will be enrolled in the Preventive Plant option. There are suggestions that acreage could rise to 3.6-4.0 Mil acres compared to last year’s 1.7 Mil.
The Central weather forecasts continue to show a warm to hot environment beyond July 7 with a high-pressure Ridge over the Intermountain West/Plains. Nebraska has been drying down quickly and entering a drought stage, with June ending as being a hot/dry month and whether this trend continues during July. The EU and GFS models suggest warm and dry weather will hold across the Central US into Monday, July 4. Models forecast several thunderstorm complexes to produce .5-1.50” of rain across the E Nebraska, Iowa, and Illinois in the middle of next week. The rain started in the west on Tuesday and migrate east into the weekend. The models then form an amplified Ridge of high pressure over the Intermountain West and progresses slowly eastward. This will produce a weather trend of above-normal temperatures and below-normal rainfall that will become concerning.
The cattle market is called mixed to weaker after finishing again lower on Wednesday as prices are on top of significant support. The Live cattle trade is waiting for cash development and is also weighing the concerns regarding the still heavy front-and supplies of cattle in the summer, and the consumer backing away from high-priced meat cuts to pay for expensive fuel. August live cattle are looking undervalued given the current cash trade is still near $138. Yesterday’s beef carcass values were lower with choice off 2.26 while select was 2.50 lower. The load count was late at 118 loads. Retail demand after the fourth of July holiday will become a concern going into the heart of summer. Feeder cattle will be affected by the reaction of feed grains in today’s USDA crop report at 11:00 a.m.