Written Commentary
CORN
Prices were $.01 – $.03 lower as spreads firmed. Since Monday’s rally May-24 has been consolidating between its 50 and 100 day MA’s, currently $4.33 – $4.52. Dec-24 made a new weekly high before drifting back closing near today’s low. Waves of precipitation are expected to impact the central Midwest over the weekend with 2-3+” likely for much of eastern plains straight north thru the central Midwest. Localized flooding is possible. Lighter amounts in the ECB and northern plains. Late yesterday the BAGE reported Argentine corn conditions slipped another 3% to 17% G/E, while poor/VP increased 4% to 40%. Harvest advanced only 3% to 20% complete. While they kept production unchanged at 49.5 mmt, well below the USDA at 55 mmt, they have a lower bias looking forward. Yesterday’s big rebound in export sales leads me to think the USDA will not alter their current export forecast of 2.10 bil. bu. in the May-24 WASDE 2 weeks from today. Sales are likely to remain strong for a few months with SA production uncertainty and the fact US is priced just below Brazil/Argentina thru June. The EPA is expected to announce their updated GREET Model next Tues. which will outline how corn based ethanol may qualify for tax credits under the Inflation Reduction Act in the production of SAF. It expected that to qualify farmers must prove they utilize precision fertilizer applications, practice no tillage or plant cover crops.
SOYBEANS
Prices were mixed with beans $.01 – $.03 lower, meal was down $2 – $4, while oil was 15 – 30 higher. An inside trading session for May-24 beans however spreads made new lows. May-24 meal rejected trade over $350 earlier in the week, support is at the 50 day MA $336.30. For the week spot board crush margins slipped $.11 to $.82 ½ with bean oil PV just under 40%. Heavy rains in RGDS in Southern Brazil will likely threaten unharvested soybeans. Little to no moisture for Central and northern growing regions with above normal temperatures over the next 7-10 days. Some risk for an early frost in far Southern Argentina next week. Late yesterday the BAGE reported Argentine harvest advanced 11.5% to 25.5%. Crop conditions held at 30% G/E however there was a 1% shift from fair to poor/VP. They held their production forecast unchanged at 51 mmt, with a lower bias moving forward.
WHEAT
Prices were higher across all 3 classes led by KC which was up $.13 – $.14, MGEX was up $.05 – $.06 with Chicago $.01 – $.04 better. SRW wheat spreads made new lows. MGEX and KC have had 7 consecutive higher closes, 6 for Chicago. May-24 Chicago and MGEX reached their highest price level since early Feb-24. KC reached its highest price since Dec-23. Some impressive rainfall totals were noted across the WCB and eastern plains in the past 24 hours, however much of SW KN along with the panhandles of TX and OK were left dry. Look for further deterioration in HRW wheat crop ratings on Monday. Extended forecasts offer better prospects for scattered precip. in eastern Ukraine and southern Russian in week 2, however confidence isn’t high. Little fresh news other than speculative traders continue to lighten up on short positions while pumping in additional weather premium with global production uncertainties.
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