• HEADLINES: NASS report bullish soybeans on seeding; seasonal lows in corn/wheat forming; Extreme Central US heat returning.

• NASS US soybean seedings fall further than expected by 2.7 million acres; US corn seedings up 400,000 acres with spring wheat seedings down 100,000 acres.

• The NASS Stocks/Seeding Report leaned bullish for soybeans with seedings down 2.7 million acres from the March Intentions, while corn acres were up 400,000 and spring wheat seedings were down 100,000 acres. The big acreage losses occurred across the Dakotas where cool/wet weather pushed producers to enrol acres into the Prevent Plant Program. The combined US corn/soybean seeding added up to 178 million acres, down nearly 2 million acres from March 31. The loss helps confirm that US farmed acres have reached a peak, and that yield will become more important in future years. Total 2022 US farmed acres amounts to 316.3 million acres, down 900,000 from 2021.

US June 1 Stocks (million bu)

                    Mar        Jun

            2020/21    2022/23    2022/23

Corn            5,002        4,111        4,346

Soybeans        1,381        769        971

Wheat            1,028        845        660

US Planted Acres (million)

                    Mar        Jun

            2020/21    2022/23    2022/23

Corn                 93.4        89.5        89.9

Soybeans        87.2        91.0        88.3

Wheat            46.7        47.4        47.1

• June Corn Data/Analysis: NASS estimated that US farmers seeded 89.9 million acres of corn, up 400,000 from the March intentions. N Dakota cut corn seedings by 17% to 3.0 million acres while acres in IL/IA/IN were virtually unchanged.

• Minnesota, Wisconsin and Pennsylvania raised their corn seedings from intentions. US 2022 corn harvested acres was raised to 81.9 million acres which is down 4% from last year. Each one of the US’s top 5 corn production states dropped their corn seeding from 2021, likely due to record input costs.

• June 1 corn stocks of 4.35 billion bu were 235 million bu above last year, but right at trade estimates. We calculate the third quarter feed/residual use at 842 million bu, down 34 million from 2021. Such corn stocks are the third lowest since 2012.

• NASS dropped their 2022 US soybean seeding estimate to 88.3 million acres, down 2.7 million acres from the March Intentions for the 4 consecutive year of decline. North Dakota seeded acres fell 16% to 5.90 million acres while Minnesota acres dropped 6.3% to 7.5 million acres. Illinois soybean acres were record large at 11.2 million acres while Ohio soybean seedings fell 3% to 4.95 million acres. US soybean harvested acres were 87.5 million acre and using trend yield at 51.5 bushels/acre would produce a crop of 4,508 million bu. This is down about 140 million bu from the March Intentions which further restricts new crop stocks. Harvest lows for November soybean futures are forecast at $13.50-14.00.

• US June 1 soybean stocks of 971 million bu were 17 million more than the average trade estimate with the third quarter residual calculated at 67 million bu, down 16 million from 2021. 2022 June US stocks are 202 million bu more than last year which is slightly bearish.  Central US cash basis bids stay strong.

• NASS pegged final US wheat ending stocks at 660 million bu, just 5 million above WASDE’s estimate in early June. Mar-May feed/residual disappearance is calculated at -54 million bu, vs. -39 million a year ago, which is in line with recent years wheat was priced at substantial premiums to corn.

• NASS lowered all-wheat planted area 300,000 acres, with spring down 100,00 and winter seedings down 200,000. All-wheat harvested area is pegged at 37.6 million, vs. 37.1 million previously, which assuming national yield is left unchanged will add 30 million bu to supply. This change is negligible and most important over the next several months will be the pace of US export sales. US wheat sales in the last two weeks have average 18 million bu, vs. 11 million in mid-June a year ago. Extremely tight US wheat stocks are projected as USDA’s Black Sea exports are overstated and the EU wheat crop must be reduced.

• The June stocks and seedings reports have come and gone. US soy production in July will be trimmed 135 million bu, with stocks to be lowered a like amount. 2022/23 US soybean stocks will be extremely tight with each 0.5 bushels/acre of yield having a big impact on price. We see the wheat market as close to a seasonal harvest low, while December corn harvest lows are forecast between $5.75-6.20 while November soybean harvest lows are forecast at $13.50-14.00 with normal weather going forward. The risk today is continued hot/dry weather in July/August that would produce a drop in yield and acceleration of the long-term bullish trend. December corn and KC December wheat are too cheap relative the weather/demand risks that are ahead. We see any weakness into the July 4 holiday as a longer-term buying opportunity.

• HEADLINES: No US wheat offered to GASC; Midday GFS weather forecast slightly wetter across the W Midwest; US gasoline demand stays strong.

• Chicago futures are mixed at midday with soybean futures higher, corn lower while wheat trades either side of unchanged. The surprise has been the strength of July futures relative to the remainder of the board.

• We have commented previously about strong US cash markets and the impact on spot Chicago futures. The July/December corn spread has pushed out to a $1.15 premium as cash corn holds firm above $8.00 while cash soybeans hold near $17.00 with the July/November spread pushing out to $2.05 premium.

• The heady July spreads are informing the US grain industry on how tight old crop stocks really are or suggesting that the minimum supplies of US corn/ soybeans that are needed are larger than what was discussed a few years ago.  Rising transportation costs and logistical snarls suggests that US corn end stocks of 1,300-1,400 million bu produces $8.00 cash corn during the crop year. And record low world exporter stock/use ratios adds to the bull thesis. The above will have a significant impact on new crop prices and how futures drop at harvest. We doubt that Dec corn can fall too far below $6.00/bu, even with favourable weather during July. November beans should hold $13.50.

• Chicago brokers estimate that funds have bought 4,100 contracts of soybeans while selling 7,500 contracts of corn and 3,100 contracts of wheat. The products have featured buying of 1,900 contracts of soyoil and 2,900 contracts of soymeal. July soymeal futures are back to within $17.00 of their contract highs that were set back in March. Cash meal in the E Midwest stays strong on demand. Feeding demand for soymeal is incredibly good.

• US wheat was not offered to Egypt’s GASC for what some suggest as a difficulty in meeting a protein spec at 11% for SRW or as others hint at, a desire of US wheat exporters to hold their stores and hedge them in forward futures to lock down a return on storage. Sometimes using the board to lock down margin beats selling wheat that you will never get back. On paper it worked for the US to sell wheat to Egypt, but it takes willing sellers for 11% SRW new crop wheat.

• GASC did receive offers for 15 exporters for shipment from mid-August into late October. The cheapest offer on a landed (CIF) basis was for Romanian wheat at $430/mt while there were Russian export offers from Cargill, Aston, GTCS, and Viterra. The Russian offers were for nearby August or September with few wanting to go forward into October. The trade awaits the decision of GASC and tonnages that they will commit to. A large purchase remains possible.

• EIA reported that for the week ending June 24 the US produced 309 million gallons of ethanol, down 1 million from the week prior, but above the 307 million gallons to achieve the annual 2022/23 USDA forecast. US ethanol stocks fell to their lowest level of 2022, while US consumers bumped up their use of gasoline. There is no indication that US consumers are cutting gasoline use too hard relative to record high gasoline prices.

• The midday GFS weather forecast has added rain to the Central and Western Midwest. Rainfall totals of 0.25-1.50” will aid crops in the Northern Plains and the Upper Midwest, while the SE US and Delta enjoys some rain from fast moving storm systems. The Bermuda High Pressure Ridge builds across the Eastern US and holds across the E Midwest/Delta by mid-July. A much warmer and drier weather pattern is likely beyond July 7, which will cause the corn market to add price risk for pollination.

• The NASS Crop Report looms tomorrow. Traders are betting that US corn acres will rise 1 million with soybean acres falling 1.5 million. We look for combined US corn/soybean acres to fall at least 2 million acres. Wheat is forming a seasonal low while Midwest July weather looks to be threatening.. We doubt that December corn can sustain much a decline below $6.00 at harvest.  The past 2 years have shown that cash corn prices rise above $8.00 with US corn end stocks at 1.350-1,450 million bu. 2022/23 end stocks are forecast by WASDE at 1,400 million bu assuming US corn yields are record large at 177 bushels/acre.

• HEADLINES: GASC tender results awaited; E Midwest forecast wetter.

• Corn, soy, and wheat futures are mostly higher at midday with July futures in the summer row crops pacing the rally. July/August soybeans and July/ September corn futures are both trading at a $1.00 premium. The cash market is tight and short holders of July futures are buying their way out. Wheat futures have been a follower with new crop supplies available and the EU harvest starting to gather steam. The USDA Stocks/Seeding Report is Thursday.

• July futures have been big gainers on new crop futures due to strong cash bids. July corn in Central IL is bid above $8.20 and not securing many bushels. Cash soybean bids are more mixed with some cash basis bids in retreat while others firm. 30-60 cents over July catches the Central IL cash soybean market with bids back near $17.00. The US farmer does not hold much old crop soybean stocks and positive crush and ethanol margins has end users seeking additional forward coverage. The sharp rise in cash soymeal bids has deepened the green on crush. The July/November soybean spread is moving back out near $2.00/bu. Key will be what Midwest weather pattern emerges in July.

• We note that Central US soil moisture is the driest during the last week of June looking backwards to the 2012 drought. This elevates the need for and importance of July rains. Central US summer row crops can go backwards fast if hot/dry weather were to persist.

• The forecasts have been highly erratic and have not yet settled on a July Central US weather pattern. Today, the models have a high-pressure ridge setting up across the Intermountain West and progressing eastward. It is the amplitude and timing of the ridge that will be important. A tropical system will be the best way to replenish Midwest soil moisture. Currently, a tropical storm looks to take aim on Mexico, not the US Gulf. We need to take note of the dry Central US soil profile and the importance of early July weather.

• There are rumours that a Russian exporter has defaulted on a wheat sale of 300-600,000 mt according to commercial sources. The defaulted Russian wheat sale has importers wondering how trustworthy Russian exporters will be during the war. AWE continue to believe that Russia will struggle to export more than 32 million mt of wheat in 2022/23 regardless of their crop size due to logistical difficulties produced by economic sanctions. Russia is not offering wheat publicly beyond the next two weeks. USDA has Russia exporting 40 million mt, a total which is far too high.

• The midday weather forecast has added rain to the Central and Eastern Midwest beyond Monday. Rainfall totals are not gauged at 0.25-1.50” which adds hope to dry crops. The Plains are drier as a high-pressure ridge sets up across the Intermountain West and pulses eastward into the Plains and the W Midwest. The ridge will produce extreme heat with highs in the 90’s to the lower 100’s. The forecast models are trying to assess the July weather pattern and the final ridge location.

• The NASS Crop Report looms Thursday with traders discussing lower acreage estimates than industry guestimates. The July weather pattern is key post report direction. We hold a bullish longer-term view seeing any mid-summer decline as a longer-term buying opportunity. Tightening world supplies will cause wheat prices to seasonally rally post the report.

• HEADLINES: Weather forecast debate ahead of USDA report on Thursday; Cash market strength shows no sign of relenting.

• Chicago grain markets are mixed at midday with soybeans/soyoil firmer with corn and wheat futures weaker. Corn is showing the most weakness due to weekend rainfall across Illinois that produced some needed soil moisture with the midday forecast offering additional showers early next week for the Western and Southern third of the E Midwest. The risk-off mentality is related to the prospect of improving Central US weather and that a ridge of high pressure shows no sign of setting up residence (at least for now) in the Central US.

• We look for a mixed Chicago close, but it is difficult to become bearish grain amid strong ethanol and soy crush margins, improving export interest and firm cash markets. Robust US export demand and the draw for US harvest supplies will hold Chicago futures above prior year harvest lows. And with only a modest weather problem, Chicago futures can test or score new highs. End users should extend forward coverage in wheat/corn and soyoil on additional weakness.

• Chicago brokers estimate that funds have sold 12,000 contracts of corn and 3,500 contracts of wheat. Funds have bought 5,400 contracts of soybeans, 4,600 contracts of soymeal and 2,700 contracts of soyoil.

• FGIS/USDA reported that for the week ending June 23 the US shipped out 49.0 million bu of US corn, 17.2 million bu of US soybeans, and 12.9 million bu of wheat. For their respective crop years to date, the US has shipped out 49.1 million bu of wheat (down 7 million), 1,866 million bu of corn (down 379 million or 17%, and 1,887 million bu of soybeans (down 220 million or 11%). Demand deferral has been ongoing due to high prices, but US exporters report that fresh interest is developing at lower prices.

• Energy markets have been at the heart of rising inflation and the Chicago grain bull markets. Almost everything in agriculture involves energy and its rising cost. And the Biden Administration stated in the G7 meeting that it saw no reason to back away from its commitment to biofuels due to climate change.  This means that Europe will also hold onto its biofuel commitments. There was a concern that the developing food crisis would cause biofuel producers to back down from prior mandates to preserve food supplies for the world’s impoverished. That concern is quickly fading which has rallied soyoil futures. Corn should also be well supported by ethanol margins with cash demand staying firm. US farmers are not willing to part with old crop corn/soybean stocks until the pollination period is past.

• We remain generally bullish of energy values on tightening supplies heading into the winter heating months. Further restricting Russian oil exports only adds to the upside potential of crude and gas values into late summer. New investment is not occurring which argues that crude oil values will rise to $140-150.00 for an annual high. Fighting inflation will be difficult.

• The midday GFS weather forecast is much warmer in the 10–15-day period, which aligns with recently released long-range climate outlooks. Maximum temperatures in the 90s/low 100s will again be spread across the Eastern Midwest. Another few model releases are needed to boost confidence in the arrival of this hot pattern, but we note that there is broad consistency among the models that heat/dryness will be featured in early and mid-July.

• Otherwise, regional/scattered showers will impact the Delta/S Midwest. Showers are possible across IA/MO and portions of W IL this weekend and the weekend. Thereafter, warm, and drier weather is forecast.

• There are many moving parts ahead of the USDA report on Thursday. Seeded acres and stocks will help the market better understand the importance of weather. A high-pressure ridge is flashed in the 10–15-day period on each model run, it is the position of the ridge that will be important We would also argue that seasonal lows will come early with farmers not being aggressive sellers off the combine in 2022/23. They won’t make that mistake 3 years in a row. We stay broadly bullish.

• HEADLINES: Chicago recovers, DOW up 600 points, GFS weather forecast trends much warmer in early July.

• Chicago ag markets are steady to higher at midday, with row crops leading the recovery as US climate outlooks turn more threatening. A welcomed cooler temperature profile lies in the offing this weekend/next week, but net soil moisture loss will be ongoing in all but the Upper Midwest. The return of widespread heat is probable beginning in early July and crop stress will be mounting if current 30-day outlooks verify. The addition premium in July does not require devastating weather, but rather yield loss of just 3-4% relative to trend pulls US corn and soy stocks in 2022/23 to pipeline minimum levels. It is the combination of tight old crop stocks and less than ideal conditions.

• Weekly US export data leans positive. Through the week ending June 16, exporters sold a net 26 million bu of corn, vs. 6 million the previous week, 18 million bu of wheat, vs. 9 million the previous week, and 1 million bu of soybeans, vs. 12 million the previous week. We note that corn export sales must average only 4 million bu/week through the balance of summer to meet the USDA’s 2,450 million bu annual target. Wheat sales must average only 12 million bu. US soy demand last week was weak, but already cumulative soy export commitments of 2,213 million bu support a 25-30 million bu revision to USDA’s old crop forecast.

• Exporters also sold another 10 million bu of soybeans for new crop delivery, with total 2022/23 soy export commitments a record large 491 million bu, vs. 277 million a year ago in mid-June. New crop soy sales already account for a sizeable 22% of the USDA’s forecast. We reiterate that the entirety of global soybean import demand in the Oct-Jan period will be funnelled to the US as supplies become exhausted in S America.

• Macro markets are firm as the Dow rallies 600 points and spot WTI crude rises $2.30/barrel. Energy markets have shed risk premium along with grains, but crude has held major chart-based support, and it is just difficult to be bearish of global energy markets. The US’s planned gasoline tax hiatus will work to increase petroleum consumption at a time when stocks are drawn down rapidly seasonally. In turn, it is tough to be bearish of corn and vegoil markets without a lasting collapse in energy prices. EIA data is delayed due to technical issues, but we fully expect a further tightening of US crude and motor gasoline stocks.

• Extreme heat will be anchored across Central and Eastern Europe, including Western Ukraine, into July 5. On the margin, this will trim EU corn yield potential further as Hungary, Serbia, and Romania account for 30% of total European corn output. Overall, weather patterns are far less than ideal in the US, Europe and Argentina in a year that record crop production is needed to ease food inflation.

• The midday GFS weather forecast is much warmer in the 10–15-day period, which aligns with recently released long-range climate outlooks. Max temperatures in the 90s/low 100s will again be spread across the Plains, Delta, and Southern Midwest. Another few model releases are needed to boost confidence in the arrival of this hot pattern, but we note that there is broad consistency among the models that heat/dryness will be featured in early and mid-July.

• Otherwise, regional/scattered showers will impact the ND/MN/WI this weekend. Light showers are possible in the E Midwest in the 6-10 day period, though accumulation will be capped at 0.10-0.25”. Rapid soil moisture loss will be ongoing.

• Markets recently have been a function of uncertainty in the Black Sea, recessionary fears, and weather. Volatility stays elevated indefinitely, but most important in the long run is whether US/N Hemisphere production is allowed to match global demand needs. Once again Sunday night weather will be critical. Our weather concerns remain high. Cash sales are on hold until there is clarity over mid/late July growing conditions.

• HEADLINES: Ag meltdown continues; Markets heavily oversold.

• Chicago Ag markets have been sharply lower on follow-through technical selling on Thursday. Soybeans have paced the decline as both July and November soybeans have fallen below their respective 100-day moving averages. Both old and new crop soybeans have traded down more than 60 cents this morning. Corn has been a close second, with new crop leading corn prices lower on similar technical liquidation as December corn fell below its 100-day moving average and has fallen 47 cents. Wheat has been the price leader in recent weeks but has been the follower on this morning’s decline and traded 38-40 cents lower.

• The USDA did not announce any corn or soybean export sales following Wednesday’s sharp break. But today’s selling has driven prices back to levels that should start to find export demand. We expect that corn and soybean sales announcements could show up on Friday and continue into early next week. The weekly export sales report has been delayed until Friday due to the earlier week holiday.

• Reuters is reporting that officials from Germany and Britain are planning to push world leaders for temporary waivers on biofuel mandates at the upcoming G7 meeting to increase world food supplies. Unfortunately, the mandates for many countries (like the US) are built into laws that will be difficult to change or modify. And a unified change in global biofuel policy would send already high global energy markets sharply higher. Moreover, reducing biofuels does not align with the Biden Administration’s pledge to increase renewable fuel use.

• Other market news is limited this week. But traders remain cautious of historical seasonal trends ahead of the June Acreage and Quarterly Grains Stocks. Yet, cash corn and soybean bids have soared on the Chicago break. IA ethanol bids have jumped to +85 to +100 (July) on this morning’s break. We maintain a long-term bullish outlook on tightening global supplies.

• Chicago brokers estimate that funds have been net sellers of 15-20,000 contracts in corn, 3-5,000 contracts of wheat, and sold 7-10,000 contracts of soybeans. In the soy product markets, funds have sold 5-7,000 contracts of soybean oil and 3-5,000 contracts in the soybean meal market.

• In other US financial markets, crude oil is marking the tenth consecutive day lower. However, liquidation has been less intense today, and losses have not been as extreme in recent days. US stock indexes are inching higher, and last week’s lows have gone untested this week.

• The midday GFS weather forecast is little changed from the morning run. Cooler temperatures will be widespread beginning Sunday, with mild readings probable throughout the entirety of next week. However, meaningful rainfall will into June 30 will be confined to ND, MN and portions of Canada. There are hints that better rain chances develop in KS, MO and IL July 2-3, and whether these stays featured in near-term forecasts is critical. The midday GFS forecast remains at odds with the morning runs of the EU and Canadian models regarding Central US ttemperatures through early July, but extreme heat is likely to be confined to the S Plains, Delta and far Southern Midwest.

• The collapse in ag markets across the world has been dramatic. We can find no real catalyst for the break other than prices were high, with many at record levels, and bull markets must be fed constantly. Markets are not accounting for potential N Hemisphere yield loss or tight June 1 stocks, but the risk of tight stocks and continued dryness in July remains very much intact. Sales are not advised at current prices.

• HEADLINES: Wheat rallies, soy falls, corn caught between; GFS warmer in July.

• Chicago ag futures are mixed at midday, with wheat extending its overnight recovery, soybeans down on weakness in global vegoil markets and corn caught in between, though the GFS forecast is a bit warmer through the balance of the week and maintains a noticeable lack of Midwest precipitation into July 7. Spot WTI crude is down $3.20/barrel at $106, a new 1-month low.

• Most important in today’s session is the Russian attack overnight of two additional key grain facilities in Ukraine. Bunge and Viterra report extensive damage to terminals in Mykolayiv along the Black Sea Coast, which provides further evidence that Ukrainian grain will likely not be shipped via the Black Sea indefinitely. War in Ukraine rages on, particularly in the east, and odds remain near zero that any humanitarian export corridor will be created this summer. Turkey plans to host additional meetings, but like previously Russia’s demand to end sanctions will be a non-starter.

• Ukraine in June is forecast to export roughly 1 million mt of corn, which our work suggests is near maximum capacity. This is decent tonnage for summer, but Ukraine’s absence from the world grain market will be felt more intensely, particularly in Europe, come October. Note that Oct-Dec Ukrainian corn exports in 2021 averaged 3.2 million mt.

• Russia’s grain/vegoil exports are also being challenged further by a new 7-year high in the Ruble. Strength in Russia’s currency has boosted US$-based interior wheat values to all-time records, with replacement wheat costs in Southern Russia now perched above $280/mt. Downside risk in Russian export offers is severely limited, and over time a majority of early-season wheat import demand will be funnelled to Europe. Even spot cash sunseed oil in Russia is valued this week at $0.78/lb amid Ruble strength. We maintain that USDA’s initial Russian grain export forecasts are much too high.

• Wheat import demand is beginning to surface. Algeria on Tuesday bought an estimated 600,000 mt of optional origin. Pakistan has released a tender for upward of 500,000 mt and Bangladesh is aiming to secure Russian origin. The formation of wheat’s seasonal bottom will be a process rather than a one-time event, but downside risk in wheat prices beyond the next 1-2 weeks is low. A wheat bottom will provide a pillar of support to global corn markets.

• Extreme US heat in the next 5-7 days will be confined to the S Plains and Delta/Southeast, where maximum highs will stay in the upper 90s/low 100s. Corn is nearing peak pollination in AR and TN. Corn growth across the Central Midwest has slowed considerably amid recent heat and eroding soil moisture/low humidity. June weather, overall, correlates poorly with final corn/soy yield potential, but there is no doubt soaking rain will be required no later than July 10.

• Interior US basis levels remain firm, with Central IL boosting late summer corn bids to $0.95 over Sep Chicago. Old crop corn’s fair value appears to exist in range of $8.00-8.30/bu. Spot Midwest soy bids remain perched above $16.80.

• The midday GFS weather forecast is warmer in the 11–15-day period but is otherwise consistent with prior output. A cooler temperature profile will blanket the Central US this weekend/early next week, but expansive high pressure ridging returns June 30-July 7, with max temperatures in the 90s/low 100s resuming across the S Plains, Delta and S Midwest. This remains a worriesome climate setup.

• Volatility in energy, equity and grain markets has been incredible since the Fed’s raising of interest rates. We must expect similar volatility until there is clarity over Northern Hemisphere grain/oilseed production in late summer. Cash sales remain on hold..

• HEADLINES: Chicago extends overnight weakness; Midday GFS cool but dry; Vegoil markets bottoming?

• Chicago ag futures are sharply lower at midday as the trade worldwide digests a shift to cooler Central US temperatures in the 6–10-day period. Yet, it is wheat that is leading the ag space lower today as harvests accelerate across the Southern Plains and Southern Europe. Additionally, Algeria is reported to have begun filling its latest tender with optional origin supplies at a price of $440/mt, including costs and freight, which is somewhat aggressive relative to best guesses on EU cash fob prices Friday evening.

• Malaysian palm oil a year ago this week scored annual lows, and the question is whether a similar price trend holds in 2022. There is no end to newly announced soybean crush plants, while end users awaiting a break in global vegoil markets are likely to return at current prices. We note that biodiesel blend profitability has soared, with Midwest cash soyoil falling to $0.77-0.82/lb and biodiesel still perched above $7.50/gallon. Margins are the best in years, and so far, there has been no evidence that US soyoil consumption has slowed despite elevated prices.

• Egypt’s GASC is similarly likely to return to the marketplace for wheat supplies.

• FGIS export inspections were released generally as exported. US exporters through the week ending Jun 23 shipped 47 million bu of corn, vs. 48 million the previous week, 16 million bu of soybeans, vs. 22 million the previous week, and 12 million bu of wheat, vs. 15 million the prior week. For their respective crop years to data, the US has inspected for export 1,817 million bu of corn, down 18% year-over-year, 1,870 million bu of soybeans, down 11% and 36 million bu of wheat, down 22%. We maintain that Census corn exports will stay well above FGIS data amid record demand from Canada and Mexico, but export data excitement will be isolated to the Census Bureau’s monthly report. Canada through April has already imported 4.7 million mt of US-origin corn, which compares to the USDA’s annual Canadian corn import forecast of 3.8 million mt. Recall it is Census data that is used in final US corn, wheat and soybean balance sheets.

• Volatility is the only certainty over the next 2-3 weeks as 6–15-day Central US forecasts dominate price discovery. Volatility this summer will be compounded by extremely lower US/global carryover stocks and as the GFS weather model will continue its transition from IBM to Cray between now and the end of June. The US weather service warned of changeable forecasts during the month of June during this transition. Today’s price action shows just how sensitive row crop markets will be to changes in temperature/precipitation, but our longer-term concern remains that of net soil moisture loss across the Plains and principal Corn Belt, which looks to continue into the first week of July. Weather markets are fast moving and take no prisoners, but the need for soaking Midwest rain becomes immediate beyond the next 10 days.

• The midday GFS weather forecast is broadly consistent with the overnight run in projecting a shift to cooler temperatures beginning late this week. The mean position of high-pressure ridging slides west and southward late this week and into next Tues/Wed. However, the ridge becomes more expansive in the 8-15 day period, which keeps meaningful rainfall confined to ND, MN and Canada. Heat will blanket the E Plains and Midwest today and tomorrow. Moderation occurs by Thursday. Cooler temperatures are needed/welcomed but the lack of projected moisture into July 6 is worrisome.

• The 2022 weather market is in full swing. Wildly swinging markets are guaranteed into the latter part of July as favourable/adverse forecasts reflect the difference between having and not enough supply in crop year 2022/23. This is no place to make new sales as moisture deficits widen, not narrow, across the larger portion of the US corn/soy belt.

• US markets are closed in observance of their Juneteenth national holiday. Market data Is therefore limited.

• MARS, the EU crop monitoring service has cut 2022 EU yield forecasts as follows:

Soft wheat 5.76 mt/ha from 5.89 last month

All barley 4.88 mt/ha from 4.98 last month

Grain maize 7.87 mt/ha from 7.92 last month

Rapeseed 3.12 mt/ha from3.17 last month

Sunflowerseed 2.37 mt/ha from 2.39 last month

• Paris rapeseed and North American canola futures are erasing their gains for the year, following a slump in palm oil prices. The world’s largest edible oil has fallen into a bear market on concern that surging Indonesian exports will challenge cargoes from Malaysia. That could ease demand for alternative oilseeds and marks a turnaround from a couple of months ago, when Indonesia temporarily restricted palm shipments to combat local food inflation.

• Palm’s losses sparked rival canola to erase its year-to-date gain on Friday, with rapeseed set to do the same Monday. That takes out advances also driven by the war in Ukraine, which is restraining sunflower oil shipments from the Black Sea region. While vegetable oil prices remain high historically, the downturn could help provide some relief for rampant global food inflation.

• Rapeseed futures dropped as much as 2.9% to €744.75/mt on the Euronext exchange. A close at that price would put the most-active contract about 1% lower on the year. Canola fell 2%, heading for a fourth straight drop.

• Rapeseed output in the European Union is also expected to top last season, and harvest is approaching. Meanwhile, rains have helped to ease drought in Canada, and Australia has favourable crop prospects at a time when fears of recession in major economies could restrain biofuel demand.

• HEADLINES: Anxiety over central US weather ahead of a 3-day weekend; Biden considering restricting US diesel/unleaded exports.

• Chicago grains are mixed at midday with corn firmer while wheat futures sag on the ongoing US harvest. Soybeans are caught in between. The sharp fall in crude oil prices of $7/barrel is producing a bearish tailwind for Chicago heading into a long weekend. Amid record prices at the pump, the Biden Administration is looking for ways to lower prices. Their hope is to push the Saudis to ramp up production. However, this would not solve the lack of US refinery capacity and tightening supplies of diesel/unleaded with spot shortages noted across the US. The crude price fall leans bearish on US grain.

• The US is seeing wheat interest with Indonesia booking 2 US cargoes yesterday, but market participants are confused by statements out of Turkey and Russia that they will allow Ukraine export corridors. The Russians and Turks continue their war of words that they are not at fault for the looming food crisis across portions of South Asia and Africa. We remain dubious that any Ukraine export corridor will ever be established. The market should be “wising up” to Russia and Turkish corridor comments.

• The acute weakness of crude oil has been produced by talk that the Biden Administration is talking fuel export limits as US pump prices surge above $5/gallon. Diesel/unleaded export limit talk has picked up in recent days. But we hear that a decision is not imminent. And export controls will hurt US’s allies including the EU. The placing of export limits on US crude oil would have no impact based on the lack of US refinery capacity. The Biden Admin also wants to push renewable fuels to assist bridging the fossil fuel shortage.

• The US$ fell sharply on news of the Swiss National Bank (SNB) raising rates 0.5% yesterday. However, today the greenback is back advancing with currency volatility rising sharply. World currency valuations are based on how Central Banks fight inflation. Japan has already announced that it will not raise rates substantially, which pounded their currency. It is the inflation fight which will adjust the value of the US$ in the coming months.

• Chicago brokers estimate that funds have sold 3,300 contracts of wheat, 4,200 contracts of soyoil, and 2,900 contracts of soybeans. They have bought 3,100 contracts of meal and 3,900 contracts of corn, and 12,000 soymeal call options

• Spot cash corn bids have been soaring as ethanol producers fight with exporters for supply. Reports of elevators and ethanol producers paying $0.60-0.90 over for corn delivered in the next 5 days. The strong cash bids should be monitored as first notice day looms for July Chicago corn futures. We would advise against net short positions in July corn due to the strong cash basis bids.

• FAS/USDA reported that 105,664 mt of US corn was sold to an unknown destination and 250,571 mt to Costa Rica and an unknown destination. The total daily corn sales announcement was just over 356,000 mt.

• The midday GFS weather forecast is consistent in projecting intense/expansive high pressure ridging across the Central US for the next 10 days. The forecast is dry for the next 5 days with a few isolated light showers late next week across the Lakes and E Midwest. Heat builds across the Plains this weekend (90s/low 100s) which pushes east across the S Midwest/Delta through most of next week. The ridge then retrogrades west to the Plains and amplifies again next weekend. This produces hot/dry weather through the Plains and the W Midwest/Delta in the last week of June. This is an amplified/expansive high-pressure ridge across the Plains/W Midwest. Our weather concern stays high.

• It is all about Central US weather come Monday night. These massive and amplified ridges have a history of longevity heading into mid-summer. The EU model has been more correct than the GFS and its bet for ongoing Central US heat and dryness. Any rainfall will be patchy.  It is a 3-day weekend and the weather risks are also higher due to the extra day.