Evening Comments (RJ O'Brien)

Evening Grain Comments - July 1st, 2025

Corn

Sept corn closed down $.02^2 @ $4.09^2. Export inspections came in at 53.9 mbu, inside the 49-66 mbu expectation and above the 48.7 mbu needed BOY. Features: Mexico 15.5 mbu, Japan 9.1, SoKo 8.3, Col 6.2 mbu. The gulf lifted 25.8 mbu, PNW 17.8 and interior 10.4. Sorghum liftings of .43 to Japan off PNW. The quarterly grain stocks and acreage report turned out to be a non-market mover. Q3 stocks corn stocks were 4.644 Bbu,  near estimate average of 4.641 Bbu. Digging in a bit gave affirmation that the eastern stocks (eastern corn belt, including IL and eastern states) were down about 280 mbu vs LY and the reason the eastern rail pull has had been pulling IL/IA over IWDS (IL River Delivery System) river parity. In the west, while stocks are like LY, there was 180 mbu less on-farm stocks and 182 mbu more off-farm stocks. i.e. available to the pipeline via basis/spreads and not flat price oriented. Acreage came in at 95.2 mln, 150K acres under the trade expectation and 123K under the March intentions. Merchandising: there were zero corn deliveries on first notice today. 

Beans

June grain stocks and planted acreage report day came and went as market reaction was mostly quiet to the uneventful report. For the day, SN and SQ were down 3’4, SX up 2’2 to 1027, July, Aug and Sept meal $0.2 better and August bean oil 0.17 better to 52.65 cts/lb. The morning began with an export flash of 204k MT of ‘25/26 meal sales to unknown and saw weekly export loadings of 8.3mbu of beans with Mexico the largest taker of those, most of it via the interior. To-date loadings of 1.684 bbu is 91% of USDA forecast, and need to average 16.5 mbu/wk for us to hit USDA’s 1.850 export estimates. June 1 bean stocks were reported at 1.008 bbu, up nearly 38mbu from a year ago at 28 mbu higher than the average trade estimate. June 1 on-farm stocks were reported 54.3 mbu less than year ago, and the RVO rally from the middle of the month moved even more bushels off-farm and isn’t accounted for in this report. Commercial stocks were nearly 92 mbu higher with IL carrying a bulk of that at almost 26 mbu more than a year ago, IA up 18.2. Commercials had been short along IWDS, bought some or most of that back in, and now continue to sell into a firming basis environment with off-farm movement basically non-existent. China booked several deferred Argy cargos before their export tax is raised, and the Argy farmer has sold nearly 7 MMT in June. The US Gulf has more net bushels available to it this year than last in its immediate draw and cash in August and September remain well below DVE (August 13c below, Sept 42c below) and appear no good currently. With a dwindling US export program and still no new Chinese business, the river shouldn’t have to compete hard for its needs. That isn’t a bearish basis statement, though, as the processors still have a large part of July and August to get covered and hearing pushes away from the river of 10-20c over posted to obtain that ownership against building carries in the spreads.

Wheat

Wheat opened higher on overnight trade, with a choppy night/day session in the end. Lots of news to chew on from inspections to report to harvest progress and conditions. Wheat settled mixed - Chicago SRW closed 2 ½ lower in the Sept at $5.38 ¼, KC 7 lower at $5.26 ¾, Mpls 7 ¼ lower at $6.20 ¾. Export inspections came in at the high end of trade expectations (7-17 mbu) at 16 mbu. Shipments by class: HRW 7.8 mbu, HRS 4.3 mbu, SRW 2.1 mbu and SW 1.7 mbu. Today’s acreage and stocks report showed wheat stocks up 10 mbu to 851 mbu. Wheat acreage came in close to the average trade expectation(45.44 mln) at 45.48 mln acres – winter wheat acre at 33.3 mln, Spring 10 mln, and Durum 2.11 mln acres. USDA raised planted acreage 100K but lowered harvested acreage 600K – increased abandonments in KS/TX(200 KS, 450 TX). Larger stocks offsetting the lower production number resulting in a net neutral report. Cash markets were quiet across space, Chicago SRW spreads seeing order flow narrow while KC HRW spread weakened.