Written Commentary
OPENING COMMENTS
Geopolitics:
China has been quietly walking back some of their tariffs on US goods.
China is estimated to have exempted around 24% of imports from the US, adding
up to around $40 billion worth of goods. Hopefully this is a trend of good news
and trade relief.
Ag Fundamentals:
South American corn and soybean production has been stepping slightly higher in recent estimates, in line with the USDA’s most recent report. The April WASDE had Brazil beans at 169 MMT, Brazil corn at 126 MMT, Argentina beans at 49 MMT and Argentina corn at 50 MMT. Over the last 2 months weather in South America has not presented any harsh or challenging conditions for both Brazil’s first corn and bean harvest and second corn crop final growing stages. Argentina received rain toward the end of their growing season and have had enough dry weather recently to progress their second crop soybean and corn harvest. CFTC Commitment of Traders report will be out later this afternoon.
Weather:
Central Oklahoma received as high as 9.8 inches of rain in the last 72 hrs. The Zion region in southwest Missouri and Northwest Arkansas also received over 7 inches in the last 3 days. There are very few areas in the heart of corn and bean production with any concern on drought. Eastern Nebraska even getting some rain this morning. The 7-day forecast has heavy rains in the south and dry weather for the areas north of central Illinois and Iowa. Minimum temperatures are expected to stay above 35 degrees across the northern plains for the next week, so no concern for frost.
Macroeconomics:
Non Farm Payrolls increased 177K new jobs in April; 44K higher than the estimate. Following the jobs report, President trump again called for Fed Chair Powell to cut interest rates, which is a bit contradicting. Unemployment stayed unchanged at 4.2%. So somewhat mixed week of job reports ahead of the Fed decision next week. The market has baked in a 98% chance the federal interest rates remain unchanged next week.
Top Three Soybean Buyers last week were China, Mexico and Germany.
Top Three Corn Buyers last week were Mexico, Colombia, and Israel.
Top Three Wheat Buyers last week were Nigeria, Colombia, and Thailand.
Export & World News
South Korea bought 35,800 MT of wheat from the US earlier this week and they are looking to also buy around 80K MT of rice in an international tender.
Malaysian palm oil futures were down 24 ringgit, at 3887.
Daily Trading Limits: Corn $0.30 (expanded $0.45); Soybeans $0.85 (expanded $1.30); Minneapolis Wheat $0.60 (expanded $0.90); KC Wheat $0.40 (expanded $0.60); Chicago Wheat $0.40 (expanded $0.60)
Weather Outlook
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