Written Commentary
CORN
Prices were $.06 – $.07 higher today, trading to new 3 week highs. Despite the strength nearby spreads weakened a touch. Next resistance for May-24 comes in at the March high of $4.48, followed by the 100 day MA, currently $4.54. Resistance for Dec-24 comes in at the March high of $4.81, which is also the 100 day MA. Markets added both war and weather premium as tensions in the Black Sea region heat up while many key wheat growing areas remain abnormally dry. Russian missile strikes over the weekend destroyed Ukrainian grain storage facilities in the Southern Odesa region while at the same time the US House passed legislation providing an additional $60 bil. in military aide for Ukraine. Last week Money managers sold just over 16k contracts of corn, extending their short position to 279k contracts, the highest in 6 weeks. Export inspections at 64 mil. bu. were a new MY high and above expectations. YTD inspections at 1.194 bil. are up 36% from YA, vs. the USDA forecast of up 26%. Mexico was the largest taker at just over 24 mil. bu. Since last July, Ukraine has exported 39 mmt of grain, down 2.6% YOY. Corn exports have reached 21.5 mmt, down 9%.
SOYBEANS
Prices are higher across the board today with beans up $.10 – $.12, meal was steady to $2 higher, while oil was up 65 – 75. May-24 beans continue to rebound after holding support above contracts lows late last week. Next resistance is at the 50 day MA, currently $11.73 ½. Nov-24 beans have moved back above its 50 day MA at $11.66 ½. May-24 meal made new highs late trading above Friday’s high, however stopped shy of the March high at $347.60. Spot oil may have set an intermediate low with last week’s trade down to 43.50. Next resistance for May-24 not until the 50 day MA at 46.80. Spot board crush margins slipped a few cents to $.92 bu. with bean oil PV rebounding to 39.5%. This week heavy rains are expected for the Central Midwest with the heaviest amounts late in the week. Planting operations will be slowed however will also help relieve drought conditions. In Southern Brazil heavy rains over the next week to 10 days in RGDS and Santa Catarina will slow the remaining soybean harvest. Net drying will occur over much of the central and northern growing regions. Mostly favorable conditions in Argentina as harvest activities look to accelerate. Last week MM’s sold just over 49k contracts of soybean oil, a record amount for 1 week. This extended their short position to 53,295 contracts. MM’s were net sellers of 28,565 contracts of beans, while buying 13,529 contracts of meal. The MM short position in soybeans has swelled to nearly 168k contracts, within 4k of the record large short position. Export inspections at 16 mil. bu. were in line with expectations. YTD inspections at 1.414 bil. are down 18% from YA, vs. the USDA forecast of down 15%.
WHEAT
Prices were higher across all 3 classes today with Chicago and KC up $.16 – $.21, while MGEX was up $.09 – $.10. Chicago May-24 surged to its highest level since late Feb-24 with next resistance at its 100 day MA, currently $5.88 ¼. KC May-24 briefly traded above both the March high and its 100 day MA at $6.06 before drifting back. Some moisture is expected across Eastern Ukraine and Southern Russia however the overall weather pattern remains dryer than normal. In the US, areas of W. KN along with OK and TX panhandles continue to miss out on rain, deepening drought conditions in the region. Last week MM’s sold nearly 10k contracts of SRW and nearly 5k of HRW while being net buyers of just over 1,500 contracts of MGEX. The cumulative MM short position across all 3 classes has swelled to just over 171k contracts, the largest since the record of 198k in Dec-23. Export inspections at 17 mil. bu. were in line with expectations. YTD inspections at 604 mil. are down 8% from YA, vs. the USDA forecast of down 6.5%. Since last July, Ukraine’s wheat exports have reached 15.1 mmt, up 10% YOY vs. the USDA foreacast of 17.5 mmt, which is down 7%. SovEcon estimates Russian grain exports last week reached 1.25 mmt, of which 1.07 mmt were wheat, down from 1.14 mmt the previous week. IKAR reports Russia’s export price for wheat ended last week at $208/mt FOB, down from $210 the previous week. IKAR also raised their 2023/24 wheat export forecast 1 mmt to 53 mmt, vs. the USDA forecast of 52 mmt.
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