Chicago corn and soybean futures were sold off last night, dragging wheat lower just as it had dragged wheat higher earlier in the week.
The US weather map is looking better, not great, just better, for the central corn belt.
The fall in corn futures at Chicago was probably as much to do with profit taking as it was to do with a response to the weather map, or maybe the realisation that US corn is expensive compared to S.American corn.
C&F China US corn is valued at approximately US$319 out of the Gulf and US$326 out of the PNW. S.American corn is closer to US$285 and Ukraine corn is even less at US$270.40. I’m not sure if Ukraine corn will continue to be on the menu from a logistical perspective though, things are getting interesting in the Black Sea again. The difference between US and S.American corn is US$34, about 86c/bu. By Wednesday this week nearby corn futures at Chicago had rallied 79c/bu since the beginning of the month.
The Russian government lowered wheat and corn export taxes out of the Black Sea this week. Reductions in production estimates for this year’s wheat crop have most punters wondering if the tax will be increased as we move through the last half of 2023 and into 2024. The tax was said to have been put in place to limit exports in an attempt to keep domestic prices lower.
The crop condition rating for the French soft red winter wheat crop declined 2% week on week. At 83% G/E it’s not exactly in a lot of trouble and is well above the 63% G/E rating given to the crop this time last year. Winter wheat harvest is underway in the south of France, around 2% of total French production now in the bin. With about 2% of the durum wheat also harvested we should start to see some quality reports soon. Dry weather is predicted for much of southern France in the week ahead, so there should be some good harvest progress for the last week of June.