Weekly Market Update 8-3-23
Here is your weekly market update from the Garden City Co-op Grain Origination Team.
How many time zones are there in Russia?
When was the hairdryer invented?
Answers at the bottom.
Market Update: Bears are in full control of these grain markets, and they don’t want to let bulls breathe is the mutual feeling. Weather has been a huge factor in the downward spiral action we have seen lately. Most model projections are seeing a mild August with rains as well, prime crop making weather for the majority of big growing areas across the U.S. Throw in the dollar index rallying you have a 5-star dinner plate for bears to feed on. Russia hit a few facilities on the Danube River again on Tuesday and the night session saw a little rally, but this was quickly sold off and old news. Soybeans have been able to briefly lift their head up off the mat based on flash sales alone. With little headlines to trade we will continue to see weather steer the ship and bears are in the captain’s chair.
Ethanol usage in aviation fuel The Biden administration is still conflicted about whether or not to grant a request from the U.S. biofuel industry to make it easier for sustainable aviation fuel (SAF) made from ethanol to qualify for subsidies under the White House’s signature climate law. A requirement in last year’s Inflation Reduction Act is that SAF producers seeking tax credits must prove that their fuel generates 50% less greenhouse gas emissions than petroleum. Backers from the Farm Belt want the administration to adopt a model that would enable corn-based ethanol to qualify, while environmentalists want inputs like used cooking oil and animal fat. The administration’s goal is to supply at last 3 billion gallons of SAF by the year 2030 and have the SAF industry supply 100% of aviation fuel demand by 2050. Biden told a crowd last week, “Mark my words: the next 20 years, farmers are going to be providing 95% of all the sustainable airline fuel.”
Crop Progress Report Last week’s heat took an expected shot at crop conditions. Corn conditions fell 2% week-on-week to just 55% good/excellent, 10% behind where the crop is on average. The biggest declines were in Texas, Kansas, and North Dakota. States that remain below 50% good/excellent include Illinois, Minnesota, and Michigan. The corn crop is reported at 84% silking and 29% in the dough stage. Bean conditions also saw a 2% slide from last week to 52% good/excellent, compared to 63% on average. The biggest hits were taken by Kansas, Louisiana, Mississippi, and Minnesota. The crop is reported at 83% blooming and 50% setting pods. The U.S. milo crop took a 5% hit this week to 55% good/excellent, which is still slightly ahead of the average. Kansas was up 2% on the week at 54% good/excellent. Spring wheat conditions are lagging way behind normal, at only 42% good/excellent, a 7% decrease from last week.
Rains were widespread over this past weekend, heading through the western and NE part of the corn belt, with action remaining mostly in the west and south throughout this week. Expectations of nice rain builds in the central and the western belt Friday and Saturday including the drier areas of the MN, IA and the Dakotas. Locally the heat is still present but backing down a little, highs in the upper 80s and 90s with lows down in the 60s. No rains expected in the 10-day.