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Limit Up

By Tori Uhland

August 2, 2023

The grain and oilseed complex started this week out on a rough note. Between a cooler and wetter forecast in prime production areas and no major Russia/Ukraine updates over the weekend, there wasn’t much of anything to get bulled up on.

Crop conditions came out on Monday afternoon, and no major changes were presented. U.S. corn Good/Excellent ratings were down a point each from last week, and Very Poor/Poor conditions were up a point each. Good/Excellent ratings are at 55 percent versus 61 percent last year. Soybean conditions were mostly unchanged; Fair was up one point from last week and Good conditions were down 2 points. The Good/Excellent rating is at 52 percent versus 60 percent last year.

Corn gapped lower on Sunday night and continued lower to start the week. Forecasts are showing the hot temperatures will stay south of the main corn belt over the next couple of weeks, so there will be moderate and ideal temperatures for the corn to finish pollinating. With the country getting back to seasonal temperatures, the volatile weather market may be over for the season. There is support in December corn at $5.10. Monday’s trade did drop below to $5.08, but came back up to settle at $5.13.

Soybeans were down very hard to start the week, thanks to the mild forecast and continued losses in palm oil futures because of higher production expected in Indonesia. August is the month that beans are made, though, so we could see some big moves depending on how the next month plays out.

Wheat is being pressured by the corn and bean markets, as well as sell offs of the risk premiums in place due to the Black Sea situation and no new escalations there. Ports in the Black Sea are still expected to remain unusable until after the war, so that does add some supply concern to the market, but not enough to be offset by the bearish news for now.

In the livestock world, cattle supplies remain tight, but beef prices and packer margins are falling. Hogs have resumed their uptrend in the market, but it is questionable as to whether or not the rally is sustainable, however, there is a seasonal tendency for prices to increase this time of year and hog weights are also lighter than normal.

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