Crop rating surprise boosted overnight.
Grain futures moved sharply higher again last night as crop condition data dropped sharply from Monday afternoon’s reports, nearly double expectations. Soybean oil traded down the 4% limit at one point last night, as Tuesday afternoon has rumors that the EPA will announce a disappointing 7% increase in biodiesel/renewable diesel RVOs today.
Crop condition reports showed corn ratings down -6% to 55% G/E and beans down -5% to 54% G/E. Winter wheat conditions were unchanged at 38% G/E, while spring wheat declined – 9% to 51% G/E. Recent extreme heat has taken a toll on the spring wheat crop, according to producers in the East, as Grand Forks, North Dakota, posted a record 100-degree high yesterday. Showers are moving through the state today and for the next several days, with 10% of the crop heading.
EPA is reported to be finalizing the 2023 advanced biofuel blending mandate at 5.94 billion gallons vs 5.82 billion gallons that was proposed. Next year’s mandate is expected to be finalized at 6.54 billion gallons vs 6.62 billion gallons proposed. The 2025 mandate is expected to be 7.33 billion gallons, off from 7.43 billion gallons estimated. EPA plans to finalize the 2023 ethanol blending mandate at 15.25 billion gallons and 15 billion gallons in 2024 and 2025. This is slightly higher than what was proposed for 2023 but slightly lower than the rule proposed for 2024 and 2025.
It’s become old news and is mostly discounted as Russia repeated today that there are no grounds to extend the Black Sea, saying that their demands have not been addressed.
Today the Central US weather forecast offers limited change moving into July as the pattern remains stuck with the warm, dry weather in the Midwest, which is still struggling to capture moisture until the end of June. Again, the models always bring in hope 10 days out, with really good rains forecasted for Iowa, Illinois, on July 1. But this has been the story for three weeks. Another drop of 3-4% in the good/excellent readings will be in the cards again for next week, with some analysts now suggesting corn production is dropping 270 BPA nationally with a sub-50 BPA soybean yield. The June Stocks/Seeding report becomes even more important to understand the actual acreage mix.
Live cattle and feeder cattle futures were lower on Tuesday, with a weaker outlet again offered this morning with the higher feed grain prices. Negotiated fed cattle markets are still quiet in all five area regions, with box beef values falling sharply and Tuesday. The early week outlook offers a cattle slaughter of 5000 head more than last week, weighing on beef prices. Tuesday, the choice cutout was off $3 to $337, and select was down $3 as well at $308. The cattle market is correcting into this Friday’s June COF report, with key support arriving on the August live cattle in the 166-168 range. The board is offering clues that the summer cash decline can be roughly $20 by the end of August.