Written Commentary
SOYBEANS
The soybean complex was higher across the board with soybeans $.08 – $.14 higher, soybean meal up $1 – $2, while soybean oil was 15 – 20 higher. There were no deliveries against soybeans or meal. Deliveries against soybean oil were 449 contracts. Money managers combined to sell over 70,000 contracts in the soybean complex in the week ended Tues. April 25th. They were sellers of just over 47,500 soybeans, 3,800 soybean oil and 19,300 soybean meal. Export inspections at 15 mil. bu. were in line with expectations and the weekly amount needed to reach the USDA export forecast of 2.015 bil. bu. YTD inspections are up less than 1% from YA, vs. the USDA forecast of down 7%. I look for this afternoons crop progress to show 16 – 18% of the soybeans planted, vs. the 5-year average of 11%. Mch-23 crush at 198 mil. bu. was at the high end of the range of est. and a record high for March. YTD crush in the first 7 months of the 2022/23 MY has reached 1.307 bil. bu. down less than 1% from YA, vs. the USDA forecast of up 1%. To reach the USDA crush forecast of 2.220 bil. bu. cumulative crush will need to reach a record 913 mil. bu. April thru Aug., just above the previous record of 900 mil. in 2020. I look for no change in the current USDA forecast in the May-23 WASDE. Soybean oil stocks at 2.364 bil. lbs. were below the range of expectations of 2.40 – 2.450 bil. lbs. suggesting strong domestic usage. I suspect soybean prices will likely be driven by Brazilian basis over the next few weeks until we get a little deeper into the US planting and growing season.
CORN
Prices were mixed with spot May-23 up $.03 ½ on strong basis and no deliveries, while deferred contracts were $.01 – $.05 lower. While there were no new export announcements, there were no additional cancellations to China. Weather forecasts continue to show gradual warming from west to east this week with overall moisture below normal. Little to no progress has been made on an extension of the Black Sea Grain Corridor. MM’s were net sellers of nearly 65k contracts last week, flipping their net position around to short 15,300 contracts. Ukraine’s Ag Ministry reports April-23 grain exports reached 3.62 mmt, well above the 923k mt in April-22 in the immediate aftermath of the Russian invasion and prior to the BSGI. In the 2022/23 MY (since July-22) total grain exports have reached 41.6 mmt, down from 45.9 in 2021/22 MY. Corn exports since July-22 have reached 24.4 mmt, nearly reaching the USDA forecast of 25.5 mmt. Corn used in the production of ethanol in Mch-23 was 435 mil. bu., while down 4% from YA, it was up 9% from Feb-23 and in line with expectations. In the first 7 months of the 2022/23 MY corn usage has reached 2.985 bil. bu., down 5% from YA, vs. the USDA forecast of down 1.4%. In order to reach the current USDA forecast of 5.250 bil. bu. corn usage April thru Aug will need to reach 2.265 bil. bu., up 3.7% from YA. The current USDA forecast is looking a bit too high. Export inspections at 60 mil. bu. were a new MY high and above expectations of 35 – 45 mil. YTD inspections are still down 35% from YA, vs. the USDA forecast of down 25%.
WHEAT
Prices were sharply lower in all 3 classes effectively erasing all of Friday’s recovery. Prices were down $.12 – $.16 in Chicago and MGEX, while being $.18 – $.20 lower in KC. MM’s were net sellers of just over 10k of Chicago wheat and 3,200 contracts of KC wheat. Their net short position in Chicago has swelled to over 113k, their largest since Jan-2018. Ukraine’s wheat exports since July-22 have reached 14.4 mmt, just below the USDA MY forecast of 14.5 mmt. This weekend frost across parts of the US plains likely were not far enough south to impact the HRW wheat crop. I look for crop conditions to improve 2 – 4% in G/E while Spring wheat plantings are likely to have reached 8 – 10%. Over the weekend Egypt purchased 365k of wheat from their domestic harvest while claiming they have stocks sufficient for 2.6 months of usage. They also announced they were tendering for an unspecified amount of wheat for June/July delivery. The optional origin tender is to close tomorrow. Jordan is also seeking 120k mt of optional origin milling wheat in a tender that closes tomorrow.
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