Nate Bruce, Farm Business Management Specialist, nsbruce@udel.edu
A mid-month rally spurred on by drought issues in the Midwest across all grains was the main market highlight for June. Prices went into retreat this past week as timely rains occurred across the Midwest. Corn prices increased well above $6.00 per bushel for several days, with December corn reaching $6.30, before retreating to current prices. Soybean prices also rallied over the month hitting the highest prices on June 21st. Like corn, they soon fell into steady retreat. As mentioned in last month’s grain market outlook, demand for US soybeans and US soybean meal is still relatively low. The major demand driver in soybeans currently is world soybean vegetable oil. Wheat prices trended higher over the month as well, driven by support from corn and soybeans. With wheat harvest fast approaching on Delmarva, the uptick in prices presented a fantastic opportunity to catch up on sales.
The June USDA World Agriculture Supply and Demand Estimates Report (WASDE) estimated corn ending stocks increasing by 1.58% from the May 2023/24 outlook estimate from 2,222 million bushels to 2,257 bushels. The USDA WASDE report estimated increased beginning stocks, and supplies from the May 2023/24 outlook estimate. Production, imports, exports, feed, and ethanol demand remained unchanged from the May report. The corn season-average farm price per bushel remained the same at $4.80. The June USDA WASDE estimated soybean ending stocks increasing by 4.48% from the May 2023/24 outlook estimate from 335 million bushels to 350 million bushels. The USDA WASDE report estimated increased beginning stocks and supplies from the May 2023/24 outlook estimate. Production, imports, exports, crushings, seed, and residual demand all remained unchanged from the May report. The soybean season-average farm price per bushel remained the same as well at $12.10 per bushel. The June USDA World WASDE estimated wheat ending stocks increasing by 1.1% from the May 2023/24 outlook estimate from 556 million bushels to 562 million bushels. The June USDA WASDE report estimated increased production and supply. Beginning stocks, imports, food, seed, feed, and exports all remained unchanged. The wheat season-average farm price per bushel decreased by 3.75% from $8.00 per bushel to $7.70.
In international grain market news, a mutiny in Russia that raised questions about Putin’s control over the country sent wheat prices soaring. This was coupled with Russia’s insistence to terminate the Black Sea grain corridor agreement. Russian leaders met with government officials from several African countries to discuss supplying the content with grain if the deal were to end. African countries are most reliant on the Black Sea grain corridor agreement. China is currently discussing new legislation to ensure food supply and security. Chinese food demand continues to increase due to the country’s high population, however several challenges exist for the country to meet the demand such as possessing only a small amount of high-quality arable land, difficulty in maintaining and increasing grain production, and insufficient emergency support. Chinese politicians are deliberating a food security law to address all these issues to ensure food security in the future. How this may impact grain markets in the long run is yet to be determined. Brazil’s National Supply Company (Conab) estimated the total grain harvest for the 2022-23 marketing year was a new record 315.8 million tons. This was a 15.8% increase from the 2021-22 estimate. Brazil saw an increase of 193 million acres planted in the 2022-23 marketing year. Continued competition from Brazil and other South American countries impact on US grain exports is something to watch closely.
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