Weekly Market Update 6-22-23
Here is your weekly market update from the Garden City Co-op Grain Origination Team.
What is the name of the tallest grass on earth?
Where were the first potatoes cultivated?
Answers at the bottom.
Market Update: Markets have been surging higher as drought conditions persist in the central Corn Belt. Today we are seeing some correction to the market and some profit taking after Dcember corn has added almost 80 cents in the last four trading days and over $1.15 in the past month. Today's drought monitor shows dryness continuing to expand further north in the plains and further east into the Corn Belt. Particularly concerning when it comes to crop conditions are Illinois, Indiana, and Iowa. There are some rains forecastsed for parts of the Belt over the weekend and into next week, but time will tell on where it falls ands how much relief it brings. While wheat has mostly been riding the coattails of strength in row crops, continued talks of Russia discontinuing the Black Sea Grain Deal paired with some global production cuts are providing some friendly headlines for wheat.
Renewable Fuels Standard Yesterday the EPA issues a final rule under the Renewable Fuels Standard program that establishes biofuel volume requirements for 2023 to 2025. EPA final numbers show a 250-million-gallon reduction in total corn-ethanol volumes for 2024 and 2025 from the original proposal, setting those volumes at 15 billion gallons for both years. In addition, EPA set the corn-ethanol volumes at 15.25 billion gallons for 2023. EPA reinstated the other 250 million gallons of a total of 500 million in 2022 illegally waived in 2016. However, advanced biofuel volumes for 2024 were finalized at 6.54 billion gallons -- down from 6.62 billion gallons proposed. For 2025, the agency also trimmed advanced volumes from a proposed 7.43 billion gallons to 7.33 billion.The rule also sets the biomass-based diesel mandate at 2.82 billion gallons in 2023, from a proposed 2.89 billion to 3.04 billion in 2024 and from 2.95 billion to 3.35 billion in 2025. In response to this news, soybean oil traded down the limit in yesterday's session. Many industry leaders have expressed disapointment that increases weren't seen and have called it a "missed opportunity" to invest in biofuels.
Crop Progress Report: Corn: Corn took a bigger hit than expected in the condition ratings released Tuesday this week. The U.S. saw a drop of from 61% to 55% good to excellent for the corn crop. Most estimates pegged a drop to 58% g/e. Kansas was one of the few states that saw a raise to the corn conditions up 1% to 57% g/e. The decrease in ratings is contributed from the drought seen in the corn belt and continued misses on rain. Soybeans: Beans saw a drop in condition rating similar to corn. The U.S. is currently sitting at 54% g/e. Kansas again saw a bump to ratings rising to 63% g/e. Milo: Planting progress for milo is catching up but still behind the 5-year average of 82% planted, currently the U.S. sits at 73% complete. Kansas, Colorado, and Oklahoma are the 3 states behind the pace. Overall, milo conditions are 3% higher from last week and sit at 60% g/e, this is ahead of the 5-year average of 55% g/e. Wheat: Not much change for wheat. The main headline is harvest is 5% behind the 5-year average pace due to rains across Kansas, Oklahoma, and Texas.
**We will not have weekly commentary for the first two weeks in July due to website maintenance. Please reach out to the Grain Team if you'd like timely market information.**
Weather this weekend has a good chance of some rain, around 50-70%. Temperatures are really heating up after the first day of summer, with humidity to combat. 90s are expected through the weekend and higher temps will persist in the high 80s throughout the week, with lows in the 60s. Winds will be in the 10-20 MPH range, which hopefully will dry down some to get a jumpstart on wheat harvest 2023 in the coming weeks.
Peru about 7,000 years ago