Written Commentary
SOYBEANS
The soybean complex was higher across the board with beans up $.10 – $.18, meal up $3 – $6, while oil was up 60 – 90. Spot meal held support at its 100 day MA before recovering. AgRural est. Brazilian soybean harvest at 86%, just below the YA pace of 87%. Friday’s CFTC report show Money Managers were sellers across the entire soybean complex. MM’s cut their long position in soybeans by 21k contracts to 125k. They were also net sellers of 2k contracts of soybean oil, extending their short position to 12,566 contracts, their largest short position since Sept-2019. Export inspections at 19 mil. bu. were in line with expectations. YTD inspections at 1.715 bil. are up 1% from YA, vs. the USDA forecast of down 7%. NOPA crush in Mch-23 at 185.8 mil. bu. was above expectations of 183.4 mil., however within the range of estimates. Total soybean crush for the month will likely reach 196 mil. bu., up 1.6% from Mch-22 and a record for the month. In the first 7 months of the Sept thru Aug. MY total crush has reached 1.305 bil. bu., still down .5% from YA, vs. the USDA forecast of up .7%. The YTD cumulative crush figure represents 59% of the USDA forecast, slightly below the historical average of 60%. To reach the current USDA forecast, April thru Aug. crush needs to reach 915 mil. bu., up from 892 mil. YA, and above the previous record of 900 mil. bu. 3 years ago. I see no change from the USDA in the April-2023 WASDE report. Bean oil stocks at 1.851 bil. were below expectations. If the USDA reports soybean plantings today they’ll likely be 3 – 6% complete. Look for nearby May-23 to remain in $14.75 – $15.45 range. Downside limited by likely further reductions coming to Argentine production, while upside held in check as US soybeans remain $85 – $90/mt above Brazilian supplies.
CORN
Prices closed $.06 – $.10 higher as May-23 broke thru overhead resistance at the April high of $6.68 ½. Next resistance is the Jan-23 high of $6.86. The recent changeover to frigid conditions across the nation’s midsection along with scattered moisture is expected to slow what was a rapid start to this Springs plantings. Supportive demand news, strong basis, speculative buying and fear that the Black Sea Grain Initiative may no longer guarantee safe passage of Ukraine grain exports also provided a boost. For the 2nd time in less than 1 week Russian officials have blocked vessel inspections at joint command in Turkey. Ukraine’s infrastructure minister is expected to travel to Turkey on Tues. to discuss the future of the BSGI. Talks between Poland and Ukraine are set to resume tomorrow after Poland and other European countries blocked imports of Ukrainian ag. products to support their own farmers interests. Friday’s CFTC report showed MM’s were net buyers of 5,565 contracts of corn, extending their long position to just over 27k contracts. While there were no new announced sales of corn this AM, export inspections at 48 mil. were above expectations, and a new MY high. This level however is still below the 50 mil. bu. needed per week to reach the USDA export forecast of 1.850 bil. bu. YTD inspections at 843 mil. bu. are down 36% from YA, vs. USDA forecast of down 25%. Look for planting progress to reach 12 – 15% in this afternoon’s crop progress report.
WHEAT
Prices closed $.11 – $.15 higher in all 3 classes. KC May-23 premium to Chicago backed off $.03 today to $1.93 ¼, just below last week’s record high at $2.01. Next resistance for May-23 KC is the April high of $9.02 vs. today’s high of $8.91. Surprisingly open interest from Friday’s trade increased in both Chicago and KC, suggesting the buying was new longs entering the market, not just short covering from speculative traders. Friday’s CFTC report showed MM’s were net sellers of just over 17k contracts of Chicago wheat, extending their short position to just over 104k, their largest short position since Jan-2018. Export inspections at 9 mil. bu. were at the low end of expectations. YTD inspections are down 3% from YA, in line with the USDA forecast. I expect a modest bounce in winter wheat crop ratings this week as portions of Central and Eastern Kansas received some moisture Fri/Sat. Expect limited progress in Spring wheat plantings as much of the Northern plains was dealing with volatile temperatures last week and rapid snow melt.
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