Grains close lower:
July Corn – 19 3/4 cents/bu (5.61 1/2)
July Soybeans –27 cents/bu (13.37)
July Chi Wheat – 22 cents/bu (6.25 1/2)
Cdn $ +0.00130 (74.425 cents)
WTI Crude Oil +1.96/barrel (72.82)
At this point, grains are just being kicked while they are down. I saw someone on Twitter call today a “Washout Wednesday”. Bearish fundamental news, coupled with poor technical readings, couples with momentum and speculation have led to this implosion. Today, CBOT November soybeans dropped below $12/bushel for the first time since late 2021. (-22% LY, -15% 2YR). CBOT December corn fell below $5/bu for the first time since Sept. 10, 2021. The all-time high of $7.66-1/4 came nearly a year ago today (May 16, 2022).
Today the news that most were expecting was released… a deal allowing Ukraine to export crops from key ports via the Black Sea has been extended by two months, to July 18th as per Turkish President Erdogan. This has led all commodities to double-digit losses. This is now the second time that a last-minute arrangement has been made to keep the corridor open. Russian officials confirmed the agreement but continue to note issues with their own exports and global food security. This now the second time that Russia has been “the boy who cried wolf”. It'll be interesting to see how seriously (or not) the market takes Russia's quitting threats next time.
To add fuel to the fire, this morning China cancelled 272,000mt of corn for 2022/23 further exasperating the slowing demand for U.S. corn. Export sales report is out tomorrow for the week ended May 11th. This cancellation will not be included in the numbers, but the estimates are below.
The EIA report today showed that for the week ended May 12th, commercial crude oil stocks increase 5 million barrels to 467.6 million while ethanol stocks increased 0.1 million barrels to 204.1 million barrels. Ethanol production increased 23 thousand barrels per day to 987 thousand. The production of ethanol used an estimated 97.2 million bushels of corn in the week ending May 12, up from 95.0 million the previous week, but down from 97.6 million the previous year. Estimated marketing year to date #corn use for #ethanol totals 3.564 billion bushels, down 173 million or 4.6% from the previous year's pace, and 35 million bushels below the seasonal pace needed to hit USDA's target.
Hard Red Wheat continues to struggle as we are given updates from the annual Wheat Quality tour. Day two estimates are due out later today, with yesterday’s showing an average yield of 29.8/acre (with them being in some of the state’s better areas).
Funds were thought to have been all sellers today. Both corn and wheat are in very short positions (lots of sellers – buy low, sell high), while beans are holding a small, long.