Grains closed mixed:
July Corn + 8 1/2 cents/bu (7.73)
August Soybeans +17 cents/bu (16.79 ¾)
July Chi Wheat -3 ½ cents/bu (10.84 3/4)
Cdn $ -0.00800 (78.83 cents)
WTI Crude Oil -0.60/barrel (121.51)
Weakness in the Canadian dollar today is allowing basis prices to creep higher as the Canadian dollar and Canadian basis values have an inverse relationship. On June 1st, Canada rose the overnight interest rate 50 basis points to 1.5%. The Bank noted that "CPI inflation reached 6.8% for the month of April – well above the Bank’s forecast – and will likely move even higher in the near term before beginning to ease." This statement put some pressure on the CAD$ as well as the Eurozone is bumping their interest rates for the first time in 11 years up 25 basis points to -0.25.
You may notice a big jump in the basis price listed on our website. We switched from July to August futures (a spread that has a large inverse), so basis is now working harder. Our old crop soybean bid has now reached the $22 threshold. November soybeans have hit contract highs today at $15.84 ¾, while July22 soybeans have reached levels not seen in a decade.
Average moves in the futures market today as July22 corn traded in a 24 ¾ range, while Dec22 corn was in a 17-cent range. August22 soybeans moved within 40 cents, and Nov22 beans traded within 31 ¾ cents. July22 wheat traded lower to start the session, before ending closer to unchanged within the 37 ¾ cent range, while July23 futures moved a 35 ¾ cents. In the past, movement like this would have been major, but lately it has been the norm!
It is expected that the trade was doing significant positioning today to prepare for the USDA WASDE report which is due out tomorrow at 12. Based on how quiet the trade has been in regard to this upcoming report, many analysts expect a fairly status-quo, relatively unchanged report.
Today USDA’s Indian branch official announced cuts to their 22/23 wheat crop from 110 million mt to 99 million mt. Lots of the trade is anticipating that number to further drop (as low as 92).
Soybeans are once again the big winners today as they rallied over fantastic demand (which tightens supply). This morning, the USDA confirmed the sale of 143,000 tonnes of U.S. soybeans for delivery to unknown destinations (500t is for 21/22, and 142.5t is for 22/23). Coupled with that sale, the export sales report was released today and showed soybeans on the high end of expectations. China, Egypt & Pakistan were among the bean buyers.
Export sales for both corn and wheat were within expectations.
Today we have seen corn move to the upside as drought forecasts for the Midwest continue to make headlines. After the wet spring most of these areas have seen, a little heat would not be an issue, unless it plans on continuing into July. Most growing areas are relatively unaffected by drought currently, but things could quickly change which is enough to add some weather premium back into the market.
So far, the corn crop has had an amazing start, leading some traders to wonder whether we might see any yield changes in the USDA WASDE report being released tomorrow. It has never raised its corn yield estimate in the June report before. Lowered it 6 times, but never raised it in June. We saw some yield changes last month, so will they change it further after such a short section of the growing period? Additionally, people are speculating about whether the USDA will keep its acreage estimate stagnant for corn given all of the lost acres unplanted in North Dakota. July corn rose for the 4th straight day & posted a 2-week high this afternoon.
A story that should not be a shock, wheat is lower today on Ukraine-Russia-Turkey export tension/peace…. Again.
Funds were thought to have been mixed today with corn and beans as buyers, and wheat as a seller.