Ag Market View for May 6.22
Soybeans ended lower. Talk of lower China food demand due to increase Covid lockdown offered resistance to soybeans and soyoil. There is also talk that China Covid lockdown could slow China, World and US economies. Talk of higher US inflation and interest rates could also slow US food and fuel demand. Informa est World 2022/23 soybean crop at 395 mmt vs 350 this year. US 127 vs 120, Brazil 145 vs 125 and Argentina 53 vs 43. Drier US Midwest weather could continue to weigh on prices. USDA May 12 report could be key. Some feel USDA should raise US 2021/22 demand and lower carryout. USDA estimate of US 2022 crop could be key to SN May price direction.
Corn futures ended lower. Talk of lower China food demand due to increase Covid lockdown offered resistance to corn futures. There is also talk that China Covid lockdown could slow China, World and US economies. Talk of higher US Inflation and interest rates could also slow US food and fuel demand. Forecast of better US planting weather may be offering resistance to corn futures. Difficult to manage risk with CN near 7.80 and new crop near 7.20. Some look at increase in corn options suggest more risk using options versus futures. Largest call open interest is near the 9.00 strike. Informa est World 2022/23 corn crop at 1,185 mmt vs 1,209 this year. US 372 vs 384, Brazil 119 vs 115, Argentina 54 vs 50, Ukraine at 20 mmt vs 42 and China 274 vs 272. Some could see current Brazil corn crop closer to 107 and Argentina at 49. Some feel USDA should raise US 2021/22 demand and lower carryout. USDA estimate of US 2022 crop could be key to CN May price direction.
Wheat futures were mixed with Chicago up and KC and MLS lower. Concern about lower US 2022 wheat crop offers support. Informa est US 2022 wheat crop at 1,791 mil bu vs 1,646 ly. HRW 607 vs 749, SRW 354 vs 361 ad HRS 484 vs 297. Some fear US HRW crop could end up lower. This week OK est their wheat crop near 57 mil bu vs 115 ly. Final US HRS crop could also be lower given late plantings due to cold and wet weather. Informa est World 2022/23 wheat crop at 769 mmt (down 19 mmt from previous est) vs 780 this year. 2022 EU 138 vs 138 ly, Russia 82 vs 75, Ukraine at 16 mmt vs 33, India 102 vs 109, China 136 vs 136, Canada 33 vs 21 and US 48 vs 45. Trade will be watching USDA estimate of World 2022/23 wheat trade matrix given slow Black Sea export pace and dry weather in parts of EU, India, US, Pakistan and Bangladesh.
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