An ugly day across the board yesterday as continued macro-economic concerns and a lack of bullish input from the USDA ramped up the selling pressure. At the close, we saw Chicago wheat down 42, with Minneapolis down 45 and Kansas City off 47. December corn was down 42, with November beans down 62.
The USDA updated their supply and demand outlook on the month using updated acreage and stocks information to make necessary adjustments. For corn, the numbers came in slightly higher than expected with the USDA cutting old crop feed use 25 million bushels and leaving all other categories unchanged. The adjustment to feed use pushed old crop ending stocks up to 1.51 billion bushels, higher than the pre-report average estimate of 1.488 billion bushels and last month's 1.485 projection.
New crop adjustments were minimal, with production increased slightly due to the minor uptick in acres seen in the June 30th report. New crop carryout is now projected to come in around 1.47 billion bushels, up 70 million bushels from last month's estimate.
Soybean adjustments were minor as well, with the USDA leaving export projections unchanged and reducing crush by 10 million bushels in the current crop year. At 215 million bushels, old crop ending stocks to use remains historically tight, but adequate.
New crop carryout came in higher than expected on a reduction to demand partially offsetting the cut to production driven by the lower June acreage number. Crush is expected to be 10 million bushels lower in the new crop year, with exports down 65 million bushels.
Globally the only major adjustments outside of the domestic outlook was seen in Chinese demand, with the USDA cutting old crop imports 1 mmt and new crop 2mmt. With edible oil imports in China dropping to a 7 year low in June on reduced restaurant demand due to Covid lockdowns and crushers still struggling with deeply negative margins, there is talk the current Chinese import estimate for new crop beans is optimistic even still.
Wheat figures came in close to expectations with minor adjustments seen to production and demand. At 639 million bushels the USDA came in slightly higher than the pre-report guess of 638 million bushels and up from last month's 627 million bushel estimate.
Global ending stocks for corn and wheat came in slightly higher than expected, with the USDA making slight adjustments to Russian production but leaving Ukrainian ending stocks relatively unchanged. In wheat we saw a drop in European production as expected, though many will argue it wasn't aggressive enough, with an increase in Canadian production expectations offsetting a good portion of that loss.
Corn figures came in higher than expected again, with increases in US carryout behind much of the month over month increase.
Outside of USDA updates we saw crude fall off dramatically as concerns of a new round of Covid lockdowns in China and worries over European economic strength refreshed recession fears. This morning's European manufacturing data actually showed some better than expected results, helping ease a bit of this concern, but many argue whether manufacturing and labor data could lag actual sentiment, masking signs of a major slowdown.
Looking ahead we will get updates from Turkey today on what many hope are the final rounds of negotiations to reopen Ukrainian ports in the Black Sea. There's been excitement regarding the reopening of shipments out of river ports thanks to the liberation of Snake Island, with thoughts we could see Ukrainian exports work towards 3 mmt this month as new routes open.
Turkish officials indicate they have several ships in the Black Sea ready to facilitate quick shipment of Ukrainian grain if an agreement is reached. Many in the industry remain skeptical of any real progress, with several analysts still severely limiting Ukrainian supplies on the world stage for the remainder of this crop year and much of next.
We will get updated CPI data first thing this morning, with traders expecting a new high tick in inflation figures at 8.8%. We will also get fresh energy information, with traders looking for another build in crude supplies. Ethanol margins have turned negative recently, though many in the industry caution getting bearish on ethanol demand, saying contribution margins remain strong.
Corn and beans are weaker this morning after being stronger overnight. Vegetable oil prices around the world continue to fall off, with Malaysian Palm Oil hitting a fresh yearly low.
Corn up 1 to 3
Beans down 3 to 5