Yesterday was an ugly day across the board, though corn and wheat managed to stabilize a touch into the close. At the end of the day we saw wheat down 7, December corn down 10 and November soybeans 62 lower.
Risk off was the name of the game as we saw markets down across the board with signs of manufacturing slow downs evident in Japan, China and the US. In addition to thoughts we see further signs of economic weakness in future data, traders are monitoring what happens with China both economically speaking and when it comes to their reaction to a planned visit to Taiwan by Speaker Pelosi.
The speaker is expected to arrive late this morning, which would be late evening Taiwan time, spend the night and visit with Taiwan's president on Wednesday. China has warned for weeks this meeting would be seen as an act of aggression by the United States as they contend Taiwan is their territory and not to be viewed by the world as an independent nation.
While several congressional delegations and other world leaders have visited Taiwan recently, with others having plans to do so in the future, Pelosi would be the highest level US political figure to visit the island since Newt Gingrich did so in 1997. Chinese leaders have issued dire warnings about the visit, saying the US would be responsible for the consequences Taiwan faces should the meeting take place.
In other news we are watching what appears to be the first successful movement of grain out of Ukrainian Black Sea ports since February, with the departure of Razoni yesterday. Reports indicate ships are beginning to make their way towards Ukraine, with the expectation of new arrivals taking place in the next couple of weeks. There are 109 days left on the current agreement, with an estimated 15-20 mmt of wheat set for export. A similar amount of corn is expected to be available as well, should the corridor remain open.
We got updated NASS demand data for June released yesterday showing we remain slightly behind USDA expectations for soybean crush on the year, but ahead slightly when it comes to corn used for ethanol. Both figures yesterday confirmed the USDA is probably on track when it comes to demand estimates for the sectors in their monthly supply and demand reports.
Export inspections continue to disappoint however, with both corn and soybeans coming in well below the amount needed to ship each week to meet USDA projections. Wheat shipments were down on the week and below what we need to ship each week as well. China was the biggest destination for corn, with Mexico the largest for soybeans and wheat.
After the close updated crop progress showed a stabilization in the corn crop with a slight improvement to the bean crop. Weather forecasts continue to show big time heat working up through the center of the nation from Texas into the Dakotas into Iowa. Models have trended wetter in the 10 day outlook over the last several days, with this morning's update being the most favorable seen. Rainfall must be realized though, as the heat is expected to stick around through the middle of the month.
Looking ahead what happens from a geopolitical standpoint today could have major effects on market direction. With China being our biggest customer when it comes to corn and soybeans any type of rift could have major implications both short and long term.
Corn down 3 to 5
Beans down 5 to 10