Written Commentary
CORN
Prices were $.03-$.05 lower closing at about the midpoint of the day’s range. Old crop was the leader to the downside as spreads weaken. Disappointing trade action despite the tighter than expected US stocks. Just shows seasonally how difficult it is to rally when US weather is favorable. Funds have likely flipped their position around to net short for the first time in over 6 months. Perhaps for now the market isn’t buying in to the USDA lofty new crop usage forecasts, particularly with exports at 2.675 bil. bu., which would be the 2nd higher ever. The USDA reported corn plantings at 62%, well above YA and the fastest in 4 years. The West continues to move along at a rapid pace while a few states in the central and eastern corn belt, IL, MO, KY, OH are running just below their historical average. Emergence has reached 28% vs. YA and the 5-year Ave. of 21%. EU corn import as of May 11th at 17.5 mmt are up 10% from YA. Global stocks/use among top exporters rose to 7.5% in May, up from 7.3% in April. This same ratio is forecast to rise to 8.5% for the 2025/26 MY, still among the lowest in the past decade. With the new crop 25/26 US stocks/use ratio at 11.6%, the Ave. US farm price at $4.20 would historically appear reasonable.
SOYBEANS
Prices were mostly higher with beans up $.01-$.02, meal was down $3.50-$5 while bean oil surged 160 points. Bean and oil spreads were mixed while meal spreads weakened. July beans briefly pierced yesterday’s high at midday before pulling back. Not much resistance on the chart until the Feb high near $11.05. New 5 week low for July-25 meal with support at the contract low just below $290. July-25 bean oil shot up to its highest level since Oct-23. A Republican led bill has been proposed to the US House Ways and Means Tax Committee to extend the 45Z biofuel tax credit for 4 more years. The biodiesel and RD markets have been operating at around 60% of their potential capacity the first few months of 2025 given the uncertainty following the expiration of the blenders credit at the end of 2024. The biofuels legislation is necessary to improve operating margins out of the red. Yesterday the USDA again lowered the amount of BO used in biofuel production by another 150 mil lbs. to 13.1 bil. Usage is forecast to rise 6.6% in 25/26 to 13.9 bil. lbs. Spot board crush margins jumped $.05 ½ to $1.39 bu. with bean oil PV surging to 46.7%, the highest since Nov-22. Much above normal temperatures for the plain states for the next 24-48 hours before cooler temperatures are ushered in along with a healthy dose of rain. Rains over the next week are expected to favor the N. plains and southern Midwest. Lighter totals around the Great Lakes region. The market will continue to be very sensitive to trade developments with China. US stocks are setting up to be considerably tighter than many expected at the start of the year as tariffs and the looming trade war with China started heating up. IMO new crop bean prices will continue to work to attract a few more acres away from corn wherever possible. Soybean plantings remain at a record fast pace at 48%, well above the 5-year Ave. of 37% with emergence at 17%. EU soybean imports as of May 11th at 12.2 mmt are up 8% YOY while meal imports at 16.3 mmt are up 24.4%. Global stocks/use among top exporters rose to 19.5% in May, up from 19.3% in April. This same ratio is forecast to slip to 8.5% in 2025/26, the lowest in 12 years.
WHEAT
Nice turn around in prices after carving out fresh contract lows in early trade. Prices ranged from $.03 lower in MGEX to $.04 higher in KC. July-25 KC held a test of $5.00 in early trade setting up the midday recovery. MGEX was pressured by forecasts for rain across the N. plains later this week following the record heat. Spring wheat plantings moved along quickly with 2/3rds of the crop now seeded. Winter wheat conditions improved another 3% to 54% G/E, above the 50% from YA and helped support the USDA lofty yield and production est. from yesterday’s report. The USDA WW production at 1.382 bil. bu. and yield at 53.7 bpa would both be the highest in 9 years. The USDA’s new crop carry-out forecast at 923 mil. bu. represents a 6 year high. EU soft wheat exports as of May 11th at 18.3 mmt are down 33% from YA. US Sec. of State Rubio will attend Ukraine/Russian peace talks in Turkey on Thursday.
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