Written Commentary
SOYBEANS
The soybean complex was lower across the board with soybeans down $.08 – $.16, soybean meal $5 – $6 lower, while soybean oil was steady to 10 lower. Still no deliveries against soybeans or meal while deliveries against soybean oil were down to 23 contracts. Both soybeans and meal had an outside day down. Next support in July-23 soybeans is last week’s low of $13.96 ½. Yesterday’s census crush data was viewed as supportive however YTD totals are still running .3% below YA, vs. the USDA forecast of up 1%. Crush April thru Aug. will need to reach a record 913 mil. bu. to reach the current USDA forecast, something that will likely be difficult as spot board margins have collapsed to their lowest level in nearly 2 years. Soybean oil production in Mch-23 at 2.340 bil. lbs. was the 2nd highest ever for any month. Stocks only grew 1% to 2.388 bil. lbs., below expectations and down 2% from YA. Planting progress advanced 10% to 19% complete, vs. 7% YA and the 5-year average of 11%. US soybean prices remain $65 – $90/mt over Brazilian supplies into the summer months. US old crop exports likely to remain very quiet despite the modest recovery in Brazil’s basis. Conab estimates Brazil’s harvest has reached 94% as of April 29th. Brazil’s government indicates April-23 exports were 14.34 mmt, well above the 11.5 mmt from YA, however below earlier est. of over 15 mmt.
CORN
Prices drifted lower into the close finishing $.03 – $.05 lower. Still no deliveries against spot May-23. No export announcements as US corn remains $25 – $35 mt over higher than SA supplies. Next support for July-23 rests at last week’s low of $5.72. Continued concern over the US banking sector, higher interest rates, the US debt ceiling, and a non-threatening forecast all contributed to the “risk off” mentality. Renewed discussions to extend the BSGI scheduled between the various parties also contributed to the bearish climate. Ukraine’s Ag Ministry believes they will have 15 mmt of corn available to export in the 2023/24 MY, well below the 24.4 mmt exported so far in 2022/23 MY. While corn used for ethanol production in Mch-23 was in line with expectations, YTD usage is still down 5% from YA, vs. the USDA forecast of down 1.4%. Usage the last 5 months of the MY will need to exceed YA by 3.6% to reach the current USDA forecast of 5.250 bil. Not impossible as margins remain near the high for the year, however appear unlikely. I do look for a nice rebound in last week’s ethanol production in tomorrow’s EIA report. Corn plantings reached 26% in line with expectations and the 5-year average, double the 13% pace from YA. Average planting progress for next week is 42%, a figure likely to be met given the weather forecast. Brazilian exports in April-23 totaled 471k mt, down 32% from YA.
WHEAT
Prices were lower in all 3 classes with Chicago finishing $.08 – $.10 lower, while KC and MGEX were down $.17 – $.20. Cheap Russian wheat continues to weigh on global wheat valuations. Longer range forecasts offer additional moisture for the US southern plains by mid-month. Spot Chicago closed below $6.00 for the first time in just over 2 years. KC July-23 fell below $6.50, its lowest price since Jan-22. SovEcon forecasts Russian wheat exports will reach 4.2 mmt in April-23, well above the 2.4 mmt in April-22. Ukraine expects to be able to export 11 – 12 mmt of wheat in 2023/24 MY after raising their production forecast to 17 mmt, down from last year’s harvest of 21 mmt. While US winter wheat ratings improved 2% in G/E to 28%, now slightly above the 27% from YA, there was also a 1% increase in VP. Fair dipped by 3%. Spring wheat plantings advanced 7% to 12% complete, still well below the 18% from YA and 5-year ave. of 22%. Look for a big jump in plantings in next Mondays crop progress. Russia was the lowest offer at $260/mt FOB for Egypt’s recent tender. No purchase yet.
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