Corn and soybeans continued to see strength yesterday on talk of drier weather emerging in the extended forecast, while wheat struggled throughout the day as harvest gets rolling around the Northern Hemisphere. At the close we saw July wheat down 20 cents in both Kansas City and Chicago markets, with spring wheat down 5. July corn was up 14, with December up 11, while July soybeans were up 29 with November up 16.
In person talks between Turkey and Russia kick off today with hope that a workable framework to open Black Sea grain transportation will soon be presented. There have been numerous reports this week of officials being close to an agreement, though many of the comments seen as of late from Ukraine seem far more hesitant than what those reports would indicate.
Overnight the head of the Ukrainian Grain Association said he believed Romania should be included in the negotiations and allowed to work with Turkey to police the situation. As it stands currently it appears Russia wants to inspect ships upon arrival to port, monitor loading and then provide an escort back to international waters, with Turkey overseeing the entire process.
Many believe Russia is intending on using the recent bombing of a port facility in Mykolaiv as leverage, after threats of continued strikes of undisclosed targets were issued over the weekend. With wheat harvest fast approaching and fall crops not far behind, shipping grain in an expedited manner is necessary to avoid the 75 mmt bottleneck Ukrainian President Zelensky warned about earlier in the week.
Outside of Black Sea developments we got updated USDA census export figures on April shipments, giving better insight into where we stand progress-wise on exports. For corn so far this year we have shipped 1.69 billion bushels, down from a year ago, but still in the top 5 for marketing year to date. If we were to keep the recent trend rolling through the rest of the marketing year we would be on track to see an increase to current USDA export projections.
However, we currently only have another 500 million bushels sold on the books, giving us around 300 million bushels worth of old crop corn sales left to be seen to meet current USDA figures.
Soybean shipments were a record, with China's counterseasonal shipments seen after a significant loss in Brazilian production was confirmed. At current pace we may struggle to meet USDA expectations, as we will need to see a continuation of strong shipments and the last few weeks have indicated a significant slowdown from April's pace.
Weather-wise many traders are beginning to discuss a potential transition to much warmer and drier weather throughout a good portion of the Corn Belt to wrap up June. Meteorologists have been befuddled as of late as an unexpected pattern shift to cooler and wetter conditions emerged in mid-May and remains entrenched across the heart of the nation still.
Most had expected the return of hot and dry weather by mid-June and models seem to agree. However, both the Euro and GFS models still show reasonably decent rainfall expected across much of the Belt in the 11-15 day forecast. At this point we know a ridge will develop somewhere in the Southwest, with where it develops having the largest implication on our summer weather pattern than anything else.
Most meteorologists continue to maintain low confidence in any long term forecast, though with the current state of the market hinging almost entirely on reasonably solid US production any threat of weather risk will be explosive.
Looking ahead we will get updated energy information this morning. Last week's ethanol production figures surprised some in the industry with the jump higher in production and reduction to stocks. Traders will be watching for whether we see a continuation of that trend or a correction to last week's numbers. Crude remains on a tear, trading to its highest level since early March this morning.
Corn up 5 to 10
Beans up 15 to 20