Jul 18, 2023

Outside key reversals higher in both corn and soybeans today. It was a little bit of confusing in terms of the price action. If this move was about weather, soybeans should have been the price leader. If it was about Russia and the Black Sea corridor, the market should have been led by the wheat trade. We ended Tuesday with some nice daily gains but off of the highs slightly. Most everything we've learned since the end of June (acres, demand, production, crop conditions) has told us corn and soybeans should continue to trend lower but knew these kinds of rallies had potential to show up. Like we have mentioned before, the funds have the ability to make the market move but they are not always moving it in the correct direction. With the amount of grain available out of Brazil, these rallies will not be friendly for basis, especially soybeans. Russia pulling out of the Black Sea corridor deal feels more symbolic than anything considering the ports are typically near empty this time of year, similar to the U.S. USDA weekly crop conditions showed a 2-point improvement in the good/excellent rating for corn which is now 57%. Soybean ratings improved more than expected, from 51% to 55% good/excellent.

December corn cleared some technical hurdles today trading through the 10, 20, and 50 day moving averages and the 38% retracement from the July low to the June high. Finishing about 6 cents off of the high gives the look that trade possibly trapped some late buyers today and we might see trade try to squeeze them out quick tomorrow.

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