Written Commentary
SOYBEANS
The soybean complex was mixed. Soybeans were $.02 – $.04 higher in old crop, while new crop futures are down $.02 – $.04. Nearby soybean meal was up $7 – $9, with new crop up $3 – $4. Bean oil was 80 – 90 lower. July-23 soybeans fell to new lows for the month, however held the Mch-23 low at $13.84 before recovering. Soybean exports were weak at only 4 mil. bu., 2 mil. each, old and new crop. YTD commitments are down 13% from YA, vs. the USDA forecast of down 7%. There was a flash sale announcement of 132k tons (5 mil. bu.) of new crop 2023/24 soybeans to an unknown buyer. Soybean meal sales were strong at 278k tons for old crop. YTD commitments have rebounded to down less than 1% from YA, vs. the USDA forecast of up 1%. The Rosario Grain Exchange lowered their Argentine production forecast another 1.5 mmt to 21.5 mmt, vs. the USDA est. of 27 mmt. Conab raised their Brazilian production est. 1.2 mmt to 154.8 mmt, vs. the USDA forecast of 154 mmt. Conab raised their export forecast to 95 mmt, vs. the USDA 92.7 mmt.
CORN
Prices were down $.06 – $.12 pressured by weak demand, mostly favorable weather and expectations for bearish new crop balance sheets in tomorrow’s USDA report. Short term forecasts suggest drought areas will continue to shrink. Extended forecasts show a cooler but dryer pattern being established across the northern corn and soybean belt. If verified should enable plantings to accelerate the 2nd half of May following some delays this week. While it was an inside day on the charts for July-23, it did give back all of yesterday’s gains and more. Dec-23 corn had its lowest close since Jan-22 however held support above this week’s low of $5.12 ¼. Old crop export sales at 10 mil. were uneventful but at least weren’t negative. YTD commitments at 1.512 bil. bu. are down 34% from YA, vs. the USDA of down 25%. Commitments are also at a 10 year low. The South Korean government ordered the culling of several hundred thousand cattle following a confirmed outbreak of foot-and-mouth disease in a central province.
WHEAT
Prices closed $.10 – $.15 lower in all 3 classes. Negotiations to extend the Black Sea Grain Initiative have ended with apparently no extension being reached. US delegates to the UN state Russia’s threat to end the agreement further weaponizes global food security. Export sales at 13 mil. bu. (1 mil. – 2022/23, 12 mil. – 23/24) were in line with expectations. Old crop commitments at 696 mil. bu. are down 3% from YA, in line with the USDA forecast. Conab forecasts 2023 Brazilian wheat production at 9.6 mmt, vs. 10.55 mmt YA. Good rains continue to fall across much of the US Southern plains, however recent rains have not yet led to improved crop ratings. It has taken months for the extreme drought to take hold in the winter wheat areas and it will take time for it to be remedied, however it appears to be heading in the right direction. Tomorrow’s USDA report will shed some light on whether it’s too late for this year’s winter wheat crop.
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