Written Commentary
MORNING AG OUTLOOK
TGIF. Grains are mixed. US stocks are higher, US Dollar is lower. Crude is lower and near $76. Bloomberg reports that for the first time since the financial crisis investors in top rated bonds backed by commercial real estate debt are getting hit with losses.
SN is near 12.38.Dalian soybean and soymeal futures were lower. Palmoil prices have dropped on talk of lower export demand and higher supply. S Brazil looks drier next week. US soybean export commit is down 16 pct vs ly and in line with USDA est. USDA est China imports at 105 mmt vs China est of 94.0. Soymeal futures near historical turning point with some looking for lower prices and record US last half 2024 crush. Matif rapeseed futures are higher on talk of lower Russia and EU crops. Favorable start to Canada crop could offset lower Russia crop. E Midwest and Delta rains continue. Argentina left their soybean crop at 50.5 mmt vs USDA 50.0. with harvest at 78 pct.
CN is near 4.65. This week, corn futures are up 13 cents. Wet US Midwest weather could slow plantings. 10-12 million acres will be planted after May 20. US corn export commit is up 30 pct vs ly and in line with USDA est. Higher US corn export demand could suggest futures may be undervalued. Brazil safrina crop remans dry. Brazil premiums though are lower on lack of China buying. Dalian corn futures were lower. EU domestic corn feed use if forecasted higher. Argentina corn harvest only 28 pct. G/E fell to 11 pct vs 14. Crop est at 49.5 vs USDA 53.0. Private SA corn crop est are 16 mmt below USDA.
WN is near 6.98. Managed funds are now long 40,000 Chicago and KC wheat contracts. Managed funds are also long 77,000 Matif wheat contracts. Still EU and Black Sea basis are weaker. Wheat futures are supported by dry US HRW and Russia forecast and wet EU winter wheat crop worries. Market is looking at big bet between spec longs and commercial looking for weaker futures due to seasonal harvest pressure. US SRW yields record but acres are down and some concern about disease due to too much rain. Early HRW yields better than expected. US HRS crop off to better starts than 2023. Russia is wild card with IGC lowering Russia wheat crop to 85.5 mmt vs 90.4 previous. Range of est are 80-87 vs USDA 88.0.
CBOT grains are closed Sunday night and Monday for Holiday.
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