Written Commentary
SOYBEANS
The soybean complex was mixed with soybeans up $.05 – $.25, meal steady to down $2, while soybean oil was 120 – 200 higher. Aug-23 beans traded above $15 for the first time since Feb-23 before pulling back. Next resistance is the Dec-22 high at $15.18 ½. Next resistance for Nov-23 soybeans is the Feb high at $14.02. Spot bean oil is back above its 50 and 100 week MA for the first time since Nov-22. Renewable diesel and biodiesel capacity was unchanged in April-23 at 5.365 bil. gallons. Soybean oil used in the production of biodiesel in April-23 was 927 mil. lbs., down 2.7% from Mch-23 however up 10.5% from YA. In the MY to date, usage has reached 6.465 bil. lbs. up 10% from YA, vs. the USDA forecast of up 12%. Export inspections at 9 mil. bu. were in line with expectations. YTD inspections at 1.816 bil. are down 5% from YA, vs. the USDA forecast of down 7%. Money managers last week were net buyers of 22.5k soybeans, 8.9k soybean oil, and net sellers of 4.9k soybean meal. May-23 census crush at 189 mil. bu. was at the low end of expectations, however a record for the month and up from 180.9 mil. in May-22. In the first 9 months of the 2022/23 MY crush has reached 1.683 bil. bu. up .6% from YA, in line with the USDA forecast. In order to reach the current USDA crush forecast of 2.220 bil. bu. crush June thru Aug. will need to reach 537 mil. bu. matching the record from 2020. Soybean oil stocks at 2.386 bil. lbs. were unchanged and slightly below expectations.
CORN
Prices limped into the close finishing steady to $.02 lower. Prices were higher most of the session in sympathy with the soybean complex. Overnight Dec-23 traded below the May-23 low of $4.90 ¾ before recovering. Upside price potential for corn is seen as limited with acres well above trade expectations. Weekend rains were mostly as expected. Look for some slight improvement in corn and soybean crop ratings this afternoon with improvements in the central Midwest offsetting reductions in the north and southwest. Best prospects for rain this week are in the north central and western corn belt. AgRural est. Brazil’s 2nd crop harvest is 17% complete, well below the 31% from YA. In addition they raised their 2nd crop production est. 5 mmt to 102.9 mmt, with the total crop reaching 132.3 mmt, very near the USDA forecast of 132 mmt. Corn inspections at 25 mil. bu. were in line with expectations. YTD inspections at 1.304 bil. are down 31% from YA, vs. the USDA forecast of down 30%. MM’s last week were net sellers of 5,500 contracts of corn reducing their long position to 52,845 contracts.
WHEAT
Prices finished mostly lower in choppy 2 sided trade. KC was down $.02 – $.04, MGEX down $.04 – $.05, while Chicago was $.07 – $.09 lower. The 100 day MA capped rally attemps in Dec-23 KC the past 2 trading sessions. Export inspections were a MY high at 12.4 mil. bu. bringing YTD inspections to 40 mil. down 32% from YA, vs. the USDA forecast of down 6.5%. According to the Financial Times, the EU is considering a proposal for the Russian Agricultural Bank to set up a subsidiary to reconnect to the global financial network in an effort to have Russia agree to extend the Black Sea Grain Initiative which expires in 2 weeks. Despite these efforts Russia remain pessimistic the agreement will be extended. Currently only 13 vessels are participating in the BSGI with June shipments reaching only 2 mmt, well below capacity. After 7 weeks of winter wheat conditions improving, MM’s last week were net buyers of 32k contracts of Chicago wheat, reducing their short position to 52k contracts, the smallest since Nov-22. They were buyers of 6.5k KC wheat extending their long position to 12,400 contracts.
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