Written Commentary
SOYBEANS
The soybean complex was mixed with soybeans steady to down $.04 – $.10, soybean meal steady to up $1, while oil was 85 – 100 lower. Both soybeans and oil closed near session lows. July-23 soybean managed to hold above the $14 level. Nov-23 soybeans broke support at $12.50, however held above the Mch-23 low of $12.47 ½. After trading down to a new 5 month low overnight, July-23 meal closed slightly higher for the day. July-23 crush margins closed at $.91 ½ , well below the long term average. Recall Mch 1st stocks were 65 mil. bu. below expectations, suggesting a higher residual, or that the 2022 crop was overstated. Last year’s crop will likely not be revised until Sept. Brazil’s soybean exports are expected to surge to 15.35 mmt in April, well above the previous est. of 12.1 mmt. This would represent a record high for April, and the 2nd highest monthly total ever. EU imports as of May 7th have reached 10.66 mmt, down 11.7% from YA. Exports tomorrow expected to range from 5 – 25 mil. bu. soybeans, 50 – 350k soybean meal, and 0- 15k tons of soybean oil.
CORN
Prices rebounded to close higher across the board in choppy 2 sided trade. Today’s trade appears largely technical ahead of tomorrow’s export sales and Friday’s USDA data. Corn and soybean plantings have so far been running at a favorable pace. This pace is likely to slow this week with the forecasts of heavy rain in the Western corn belt. The recharging of soil moisture however will bode well for long-term crop development. July-23 led the way closing $.09 higher after seemingly running out of sellers below $5.80. Resistance rests at Monday’s high of $6.00. Deferred contracts were up $.02 – $.04. New crop Dec-23 corn traded to its lowest level since Jan-22 before rebounding. EU imports as of May 7th have reached 23.2 mmt, up 67% from YA. Ethanol production slipped to 965 tbd last week, down from 976 tbd the previous week. Corn usage at 97 mil. bu. was below expectations and below the pace needed to reach the USDA forecast for the 10th consecutive week. Oddly enough implied gasoline demand rebounded sharply last week, up 7% from the previous week and up 8% from YA. Ethanol stocks slipped to 23.3 mil. barrels, its lowest level since Nov-22. Conab is expected to show a modest increase to their Brazilian production forecast in the AM. Exports tomorrow are expected to range from -5 – 40 mil. bu.
WHEAT
Prices were mixed at with MGEX holding on to $.02 gains, while KC was steady to $.01 lower, and Chicago $.02 – $.04 lower. Resistance for July-23 KC rests at the Mch-23 high of $8.86. July-23 MGEX continues to flirt with its 50 day MA at $8.55 ¼. Good rains were fell across much of the northeast 2 thirds of Kansas the past 24 hours. That said however, recent rains haven’t led to improved conditions in the state. Outbound shipping lanes have reopened in the Black Sea to clear vessels ahead of the May 18th deadline. While negotiations to extend the BSGI are ongoing, no deal has been struck, however Turkish officials stated they were optimistic another 2 month extension could be reached. Lot of uncertainty as we move towards Friday’s production report and the looming deadline of the BSGI. My crop condition model is forecast WW production at 1.264 bil. with an average yield of 44.1 bpa. The average trade est. is 1.218 bil., with a wide range from 1.080 – 1.371 bil. EU soft wheat exports have reached 26.5 mmt as of May 7th, up 11% from YA. Algeria is believed to have purchased 500k mt of wheat at roughly $276/mt CF from Russia. Export sales tomorrow expected to range from 6 – 20 mil. bu.
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