Written Commentary
CORN
Prices firmed up in late trade closing $.04 – $.05 higher with old crop leading the recovery. May-24 briefly traded above LW high at $4.32 before backing off. The USDA announced the sale of 110k mmt of corn to Taiwan. Export inspections at 43 mil. bu. were in line with expectations. YTD inspections at 812 mil. bu. are up 35% from YA, vs. the USDA forecast of up 26%. Corn used in the production of ethanol in Jan-24 at just under 434 mil. bu. was below expectations and down 10% from Dec-23. In the first 5 months of the 23/24 MY usage is up 5.4% from YA, vs. the USDA forecast of up 4%. Money managers were buyers of just over 45k contracts of corn last week reducing their short position to 295k contracts. AgRural reports Brazil’s 2nd corn crop plantings have reached 86%, up from 73% LW. At the Commodity Classic on Fri. USDA Ag. Sec. Vilsack stated a final ruling on whether corn based ethanol will be eligible for tax credits in the production of SAF will be made in “week’s, not months”. A close above $4.32 this week in May-24 futures should give bulls increased confidence near-term lows are in.
SOYBEANS
The soybean complex was slightly higher across the board today with beans up $.04 -$.06, meal $1 – $2 higher while oil was steady to 5 better. May-24 beans also traded above LW high of $11.61 ½ before settling back. Same with May-24 meal while May-24 oil had an inside day. Weather conditions in SA remain mostly favorable. Weekend precipitation in Brazil favored the northern and central growing regions along with the deep south. Driest areas were MGDS, Sao Paulo and Parana. A favorable mix of sunshine and rain is expected over the next week to 10 days. The USDA reported the sale of 126k mt of soybean meal to an unknown buyer mixed between old and new crop. Export inspections at 37.5 mil. bu. were in line with expectations. YTD inspections at 1.255 bil. are down 20% from YA, vs. the USDA forecast of down 14%. Soybean crush in Jan-24 at just under 195 mil. bu. was below expectations, down 5% from Dec-23 and a 4 month low. In the first 5 months of the 23/24 MY crush is up 4.7% from YA, vs. the USDA forecast of up 4%. MM’s were sellers of nearly 24k contracts of beans last week extending their short position to 160k contracts, within 8k contracts of a record. This was the 15th consecutive week MM’s have been net sellers. AgRural reports Brazil’s soybean harvest has reached 48%, up from 40% LW.
WHEAT
Prices were higher across all 3 classes today led by MGEX and KC which were up $.12 – $.16 while Chicago was $.04 – $.06 higher. May-24 KC had an inside trading day, while May-24 Chicago scratched out a new contract low overnight. Much above normal temperatures across the northern half of the US Midwest and plain states has begun to give way to a more normal temperature pattern. 7 day rainfall is still expected to favor the SE and ECB however some beneficial rains are expected for eastern Iowa. Much lighter rainfall totals across the WCB and plain states. Export inspections at 13 mil. bu. were in line with expectations. YTD inspections at 476 mil. are down 17% from YA, vs. the USDA forecast of down 4.5%. MM’s were buyers of 12k contracts of Chicago wheat reducing their short position to 56k contracts. ABARE forecasts 23/24 Australian wheat production at 26 mmt, down 36% from YA and very near the USDA forecast of 25.5 mmt. IKAR reports Russia’s wheat export price last week ended at $203/mt, down from $215 the previous week. SovEcon estimates Russia exported 1.12 mmt of grain last week up from 1.03 mmt the previous week. Wheat exports were 910k mt, vs. 870k the previous week.
Chart provided by CQG
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