The U.S. Department of Agriculture (USDA) on Monday released its Weekly Export Inspections report. Export inspections came in strong. However, grain markets reacted differently. A market strategist explains what brought corn down nine-and-a-quarter cents and soybeans down seven cents.
Export inspections for the week ending June 28th came in at 1.5 million metric tonnes corn and 850,000 metric tonnes soybeans. Brian Grossman, Zaner Ag Hedge market strategist, says he likes to see such strong export numbers. However, the Chicago Board of Trade had different feelings about it. Grossman adds numerous components are influencing this week’s market.
“One, the heat is starting to fade away. Last week, we had a little bit of a fearful story going that we could have a hot one coming,” Grossman said. “Temperatures dropping back down to warm, and not extreme is less concerning. To top it off, we had a political turnover in Mexico with the far-left presidential candidate and many of his partners in that party taking large gains on their election. That is a bit concerning, as we export a lot of corn to Mexico and that could inflame a lot of trade relations. Also weighing on the market is USDA announcing (that) if tariffs do take effect this Friday, the following WASDE report will reflect what changes they feel those tariffs are going to bring to demand.”
Grossman says grain markets will continue to maneuver through weather forecasts long after the Fourth of July holiday.
“We’re going to be knee-deep in a weather market through at least the end of July,” Grossman said. “Nighttime temperatures are pretty much the only bullish argument that a lot of people can be making, which is a concern. Trade is probably going to be an equally hot topic here as we move through this month.”
Grossman advises growers to “wait it out” and “see what can develop trade wise,” as he believes the immediate impact of recent tariffs are being over exaggerated.