Grain Outlook Big price swings, little action

The following marketing analysis is for the week ending July 14.

CORN — Corn was influenced this week by weather forecasts, crop conditions, the build-up to the July World Agriculture Supply and Demand Estimates report, and events in the Black Sea. Early week action was sideways, higher without sharp swings. Weather forecasts for the last half of July and possibly into early August are now leaning toward hotter, drier conditions for the Corn Belt.

The Black Sea grain agreement ends on July 17 and there is uncertainty over what Russia’s next move may be if the agreement isn’t extended. In the last week, a Russian drone hit a grain facility in Odesa, causing a fire. Fortunately, the fire was quickly extinguished and caused minimal damage, according to news reports.

A plunging U.S. dollar also provided underlying support as it seemed to draw money to the agricultural space. It fell to its lowest in 15 months. Price indexes were lower than expected which has led to ideas that inflation is easing, and further interest rate hikes may not be needed.

Late in the week, it was reported India was considering curbing rice exports. Why is this important? China is a large buyer of broken rice from India that they use in livestock feed. This could open a window for U.S. corn imports.

The July 12 WASDE report for the 2023-24 balance sheet: yield slashed by 4 bushels per acre to 177.5 bu./acre vs. 176.6 bu./acre estimated and 181.5 bu./ acre last month. Production was increased by 55 million bushels due to acreage increased by 2.1 million acres to 94.1 million acres. Production is 15.32 billion bushels vs. 15.234 billion bushels estimated and 15.265 billion in June. Ending stocks were up 5 million bushels at 2.262 billion bushels compared to 2.26 billion estimated and 2.257 billion last month. World ending stocks were 314.12 million metric tons compared to 314.33 mmt estimated and 313.98 mmt last month. Brazil’s corn production was pegged at 129 mmt and Argentina›s at 54 mmt, both unchanged from last month.

On the 2022-23 balance sheet, feed usage was raised by 150 million to 5.425 billion bushels, ethanol was cut by 25 million to 5.225 billion, and exports