Ag Market View for May 24.23
The soybean complex was mixed with very little fresh news available to drive price. Spot soybeans were up $.02 while deferred contracts were steady to down $.03. July-23 appears to be consolidating around $13.25. Soybean meal was down $1 – $4 with July-23 reaching a new 6 month low. Next support is $397. Soybean oil was 20 – 25 higher. Conab reports Brazilian soybean harvest has reached 98.5%. Spot board crush margins fell $.09 today to $.88 bu. Demand for US soybeans is likely to remain scarce with SA supplies still available at a $35 – $45/mt discount to the US thru mid-summer. Export sales tomorrow are expected to range between (2) – 25 mil. bu. soybeans for both and new crops combined, meal exports 150 – 450k tons, and oil 0 – 10, tons.
Spot corn remained strong closing $.10 higher while deferred contracts backed up closing $.02 – $.03 higher. Resistance for July-23 rests at $6.00, followed by its 50 MA, currently $6.06 ¾. With virtually no rains forecast for key growing states into early June, weather premium is being restored. Early season dryness is welcome in order to finish up plantings while also establishing a deep root system, however the risk is that early season dryness evolves into a full blown drought much like 2012. The midday GFS forecast has been trying to add rains in the Western corn belt for late next week. Confidence that far out however is not high. Ethanol production slipped to 983 tbd last week, down from 987 tbd the previous week. Corn usage at 98.5 mil. bu. continues to run below the pace needed to reach the USDA forecast of 5.250 bil. bu. Lower ethanol production along with a surge in gasoline demand enabled ethanol stocks to plunge to 22 mil. barrels, well below expectations and the lowest in 6 months. Gasoline demand last week at 9.437 mbd was up 6% from the previous week and up 7.3% from this same week YA. Good rains are forecast for southern Brazil late this week that would benefit their late maturing 2nd corn crop. Export demand will continue to be weak as SA supplies are priced $10 – $20/mt discount to the US. Tomorrow’s export sales report is expected to range between (15) – 15 mil. bu.
Prices were under moderate to heavy pressure all day under the threat of additional imports from EU countries, lofty yield forecasts for US SRW wheat, as well as additional rains forecast for drought areas of the US southern plains. KC closed down $.24 – $.29, MGEX $.21 – $.23 lower, while Chicago was down $.14 – $.16. KC July-23 gave back all of yesterday’s gains however held above Monday’s low at $8.07 ¼. Chicago July-23 is back challenging the $6 level while July-23 MGEX closed back below the $8 level. Ukraine continues to blame Russian inspectors for holding up vessels from reaching the port in Pivdennyi, 1 of the 3 ports designated by the BSGI for the safe passage of Ukrainian Ag. products. A tour of Illinois winter wheat crop forecasts average yields reaching 97 bpa, well above the May-23 USDA forecast of 78 bpa, and the record yield of 79 bpa set the last 2 growing seasons. Quite the difference in expected yields from Illinois to Kansas. Export sales tomorrow are expected to range from 5 – 15 mil. bu.
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