Written Commentary
CORN
Prices were $.02-$.03 lower today in choppy 2 sided trade. Spreads weakened ahead the Goldman roll which begins on Friday. July-24 slipped to a fresh 6 week low, however held support above the April low at $4.35 ¾. Dec-24 violated support at the April low of $4.59 ½ closing on its low. The overall temperature trend is expected to be cooler than normal into mid-month. Longer range maps do show a high pressure ridge shifting from the western US into the plains and WCB towards the end of week 2 of the outlook. Initial heat will be welcome to promote crop development with the risk being the start of extended period of hot/dry conditions into mid-summer. Ukraine’s Ag. exports in May reached 5.9 mmt with 5.1 shipped from Black Sea ports and .8 mmt thru the Danube River. Since July-23 their ag. shipments have reached 47.4 mmt, up from 45.6 mmt YA. Corn exports have reached 26.9 mmt with roughly 3 weeks left in the 23/24 MY vs. the USDA forecast of 26 mmt for the 23/24 MY. Ethanol production rebounded to 1,072 tbd LW, above expectations and the pace needed to reach the USDA corn usage forecast of 5.450 bil. bu. There was 107.5 mil. bu. of corn used in the production process, or 15.34 mil. bu. per day, just above the 15.22 mbd needed to reach the USDA. Ethanol stocks fell to a 5 month low at 23.05 mil. barrels however are above YA stocks of 22.9 mb. Implied gasoline usage fell 2% last week to 8.946 mil. barrels per day and was down 3% YOY. Export sales tomorrow are expected in a range from 28 – 50 mil. bu.
SOYBEANS
The soybean complex was mixed with beans down $.02-$.06 with bull spreading noted, oil was 45–50 lower while meal was $1.50 – $4.50 higher led by spot July. July-24 beans violated yesterday low at $11.76 on the close. Next support is the April low at $11.45 ¾. Resistance is just above the $12 level at the 50/100 day MA’s. Nov-24 beans fell to a fresh 6 week low however held support above the April low at $11.46 ¾. Support for July-24 oil is at 42.50. For now July-24 meal has rejected trade below its 50 day MA. Strong meal basis fueled the bull spreading. While Argentine farmers were aggressive sellers of beans in May, 5.33 mmt vs. 2.8 mmt in April, YTD sales represent only 39% of their expected production, the slowest in 9 years. Heaviest rains over the next week will be in the southern Midwest and Delta region. Very little moisture for the central Midwest and NW corn belt. Much of Brazil and Argentina will be dry for the next week to 10 days allowing harvest to accelerate. Drought conditions in Mexico will only deepen into mid-June. Spot board crush margins rebounded $.06 today to $.88 bu. with soybean oil PV falling to 37.5%. Dr. Michael Cordonnier raised his soybean acreage forecast 300k acres to 86.8 mil. while dropping corn 500k acres to 89.5 mil. on delayed plantings in the WCB. While there is still much uncertainly on Brazilian production due to flooding in RGDS, US demand remains weak with US beans priced $5 – $10 over SA supplies thru August. Export sales tomorrow are expected to range from 8 – 28 mil. bu. for beans, 150 – 400k tons meal, and 0 – 15k tons of oil.
WHEAT
Prices were $.10 – $.12 lower across all 3 classes today despite large purchases by global importers in the past 24 hours. July-24 Chicago violated support at $6.50, with next support at $6.33. Support for KC July-24 is at $6.60. Yesterday Egypt’s GASC bought 470k of wheat from Black Sea and European origin while Algeria is believed to have bought just over 800k mt from Black Sea origins. In the past 24 hours US weather saw 1–2” rains in NE TX, eastern OK and along the Gulf coast. Pockets of heavy rain stretched from eastern KS north and east thru the central Midwest right up to the MN/Canadian border. A hot/dry pattern is expected to remain in place for Southern Russia and surrounding areas. SovEcon cut their Russian wheat production forecast another 1.4 mmt to 80.7 mmt, vs. the USDA est. of 88 mmt. Look for the USDA to lower this forecast in next Wednesday’s WASDE report. IMO the market is pricing in higher US winter wheat production in next week’s USDA report. Export sales tomorrow are expected to range from 5 – 20 mil. bu.
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