Written Commentary
MORNING AG OUTLOOK
Grains are higher. Risk off risk on. US stocks are lower, US Dolar is higher. Crude is lower. Gold is lower.
SN is near 12.41. SN-SX spread dropped to near +21. Board oil share near 38 pct. Soyoil prices are lower than last year. Palmoil prices are also lower on talk of lower export demand and higher supply. S Brazil looks drier next week. US soybean export price have narrowed gap vs Brazil. There is talk that China reserve has bought 2 US soybean cargoes for July. EU soybean imports to date down 22 pct vs ly, soymeal down 6 pct. Increase US Midwest rains could slow soybean plantings. China buying US soybean could suggest futures may be undervalued.
CN is near 4.62. Wet US Midwest weather could slow plantings. 10-12 million acres will be planted after May 20. Ukraine corn prices are less and less competitive vs US shifting some demand to US. EU corn imports to date down 34 pct vs ly, Matif corn was lower on talk Spain bought US corn. Chicago wheat-corn spread +252 and highest since May, 2022 when spread was +334. Higher US corn export demand could suggest futures may be undervalued.
WN is near 7.14. Monthly nearby Chicago wheat chart finally breached 50 DMA. Next resistance 7.77. Wheat futures are supported by dry US HRW and Russia forecast and wet EU winter wheat crop worries. IL SRW wheat crop test est IL wheat yield at 104 bpa vs ly tour est of 97. US 2024 IL wheat yield is 83 vs ly record of 87. In a rare report, China admitted 379 mt hectares of rice, corn and wheat acres were loss due to floods, droughts and freezing temps. They announced new full cost insurance for corn, wheat and rice farmers planting income.
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