6/27/2023

A higher open was the assumption for Monday night following a crop conditions report that showed larger declines in corn than what trade was expecting. The USDA came in with a 50% good/excellent rating on the corn (52% trade, 55% week ago, 67% year ago) and the soybeans were rated at 51% good/excellent (51% trade, 54% week ago, 65% year ago). It really feels like this has suddenly turned into a race between those surveyed to see how quickly they can kill the crop off. These ratings are extremely subjective but with 35% of the corn and soybeans rated as ‘fair’, we're need to assume that approximately 85% of the U.S. crop is average or better. Applying the most pressure to the market today was a sudden change in the forecasts that is putting substantial rains in the areas that need it most, including southern and central Illinois, Indiana, and along the Missouri/Iowa border. If these rains materialize, any upside potential will be limited for now unless we get a surprise in Friday's reports. The market has been obsessed with 2023's correlation with 2012 and 2013 on the board and is making countless comparisons to yields in other dry years but the lack of demand in 2023 really makes this year unique.

If history teaches us anything, it is likely that the December contract will exceed the May low of 490’6. During the past 64 years, the annual low has occurred during the month of May only 2 times.