Written Commentary
MORNING AG OUTLOOK
Grains are lower. Risk off. US stocks are higher, US Dollar is lower. Crude is unch but near $7. Gold is lower.
SN is near 12.45. SN-SX spread is back to near +27. Dalian soybean and soymeal futures are back near recent highs. Palmoil prices are lower on talk of lower export demand and higher supply. S Brazil looks drier next week. Brazil crush is down due to RGDS floods. This has firmed Brazil soyoil basis. US soybean export price have narrowed gap vs Brazil. Weekly US soybean export sales est at 275-500 mt vs 265 last week. Soymeal sales could be 200-500 mt vs 300 last week. Matif rapeseed futures are higher on talk Russia may need to replant entire crop due to frost damage. Favorable start to Canada crop could offset lower Russia crop. E Midwest and Delta rains continue.
CN is near 4.61. Wet US Midwest weather could slow plantings. 10-12 million acres will be planted after May 20. Weekly US ethanol production was up for 3rd straight week. Stocks dropped from last week but are up 10 pct vs ly. Ethanol basis is firm. Weekly US corn export sales are est at 500-1,280 mt vs 742 last week. Higher US corn export demand could suggest futures may be undervalued. Brazil safrina crop est near 96 mmt or down 10 pct vs ly. Brazil premiums though are lower on lack of China buying. Dalian corn futures are at 3 month highs.
WN is near 6.87. Wheat futures look like a technical blow off top. US harvest could be earlier and bigger than last year. US farmer is selling wheat before harvest. Matif wheat futures also could be toppy with funds now long 77,000 contracts. Tunisia wheat tender suggest EU and Black Sea basis is lower. Wheat futures are supported by dry US HRW and Russia forecast and wet EU winter wheat crop worries. Trade will need to watch Russia export policy with now Russia controlling exports, Russia did announce higher wheat prices is inflationary. Plus increase in Ukraine war intensity raises question about export logistics.
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