Written Commentary
CORN
Prices ranged from $.06 lower in old crop to slightly lower in new crop. New 5 month low for July-25 futures with next support at $4.37. The July/Dec spread hit a 2 month low at $.08 ½. Overnight strength in the Ag. space quickly wore off as did the enthusiasm of the news that US/China will meet this weekend in Switzerland to discuss the current trade dispute. Late pressure likely driven by reports that Pres. Trump isn’t open to pulling back on 145% tariffs with China. Ethanol production slumped to 1,020 tbd, or 300 mil. gallons, down from 306 mil. the previous week, however still up 5.7% YOY. There was 102 mil. bu. of corn used in the production process, or 14.55 mil. bu. per day, below the 15.06 needed to reach the USDA forecast of 5.50 bil. bu. In the MY to date there has been 3.678 bil. bu. used, or 15.07 mbd, an annualized pace of 5.502 bil. Ethanol stocks slipped to 25.2 mil. barrels, slightly below expectations and the lowest in 16 weeks. Implied gasoline usage fell 1% LW to 8.717 mbd and was down 4.2% YOY.
SOYBEANS
Prices pulled back from the overnight strength closing mixed. Beans ranged from $.02 lower in old crop to $.03 higher in new crop. Meal was $2 higher while oil was down a full $.01 per lbs. Spreads were weaker in beans and oil while mixed in meal. July-25 beans quickly pulled back below its 100 day MA at $10.42 ½. Resistance is at the April high at $10.67 ½. Weekend meetings with China are expected to be preliminary while trying to de-escalate the heightened tensions. Inside trade for July-25 meal with support at its contract low just below $290. Outside trade day down in July-25 oil following comments from a speaker at a biofuel conf. in Chicago that stated the “blender tax credit isn’t coming back”. Expect additional shifting of bean oil usage away from biofuel production into exports in Monday’s WASDE report. Spot board crush margins rebounded $.08 to $1.30 ½ while bean oil PV collapsed to 44.5%. US weather remains favorable for spring plantings. Lite, scattered rains the next couple days over portions of the central Midwest isn’t expected to cause significant delays. Heavy rains the past 24 hours in SW KS, E. TX and Gulf coast will gradually shift east bringing widespread heavy rain to the SE. A wire service report from AgroConsult suggests bean acres in Brazil would increase 500k hectares this fall to a record 47.9 mil HA, just over 118 mil. acres compared to the US at nearly 83.5 mil. Obviously a lot can change ahead of their planting season that begins in Sept. with the US growing season US/China trade talks having the most impact.
WHEAT
Prices ranged from a penny higher in MGEX to $.05 higher in CGO and KC. Spreads were slightly better. Winter wheat conditions improved 2% to 51% G/E, in line with expectations. Spring wheat seedings advanced 14% to 44% complete, while just below YA they remain well above the 5-year Ave. Census exports in Mch-25 at 67 mil. bu. brought cumulative 24/25 MY sales to 657 mil. bu. up 16% from YA, in line with the USDA forecast. To reach the current forecast, sales April thru Aug. will need to reach 163 mil. vs. 130 mil. YA. EU soft wheat exports as of May 4th have reached 17.8 mmt down 34% from YA. Heat and dryness is starting to raise potential issues with wheat production in EC China.
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