Written Commentary
CORN
Prices were $.01 – $.02 higher today and up $.12 for the week. Early weakness was likely fueled by better than expected rains in MGDS and Parana in the past 24 hours, providing relief to their 2nd corn crop. Near term resistance for July is at this month’s high at $4.75 ½ and $4.96 ¾ for Dec. After yesterday’s close the BAGE reported a 3% shift in Argentine corn ratings with G/E down to only 11%, while poor/VP rose to 49%. Despite the lower ratings they held their production forecast unchanged at 46.5 mmt, well below the USDA’s est. of 53 mmt. Harvest advanced only 3% to 28% as farmers continue to focus on bean harvest. Datagro lowered their forecast for Brazil’s 2nd corn crop by 1.4 mmt to 90.5 mmt, right between the recent AgroConsult est. of 96.7 mmt and Conab at 86.155 mmt. Safras & Mercado lowered their total Brazilian production forecast by 3 mmt to 123.3, vs. the USDA est. of 122 mmt and well above Conab at 111.6 mmt. Initial US crop ratings are likely to be historically high. Crop conditions usually begin once emergence has reached 50%. Emergence stood at 40% as of last Sunday.
SOYBEANS
Prices were mixed with beans $.04 – $.09 higher with spreads firming, meal was up $5 – $10 also led by a surge in July futures, while oil was down 25 – 35. July-24 beans matched yesterday’s low in overnight trade, setting up today’s recovery despite still not seeing any announced sales to China. Nov-24 beans continue to hold in a $11.95 – $12.30 range. Spot meal surged on cash tightness with the recent slowdown in crushing pace. Next resistance for July-24 is the May high at $390. July-24 oil failed at this week’s attempt to break technical resistance at the 100 day MA. Prices appear likely to trade back to support near $.44. Spot board crush margins jumped $.10 today to $.96 ¾ bu., the highest since early Feb-24. Bean oil PV fell back below 37%. Heaviest rains over the Holiday weekend appeared centered over the Great Lakes region and ECB. Much lighter amounts over the far WCB and SW plains. Rainfall will gradually diminish in RGDS in Southern Brazil this weekend enabling a dryer trend to develop. Datagro lowered their Brazilian production forecast slightly to 147.6 mmt in line with Conab and below the USDA 154 mmt est. RGDS soybean harvest has advanced to 91% complete. The BAGE reports Argentine soybean harvest advanced 14% to 78% complete while leaving their production forecast unchanged at 50.5 mmt, just above the USDA forecast of 50 mmt.
WHEAT
Prices were steady to higher across the 3 classes today. KC led the way up $.11, MGEX was up $.08 – $.09 higher while Chicago was steady to $.01 better as spreads weakened. Chicago July-24 settled just below $7, down from this week’s 9 month high at $7.16 ¾. Fresh 8 month high for July-24 KC, next resistance at $7.50. MGEX July-24 scratched out a 5 month high, next resistance at $7.76, 50% retracement from July-23 high to April low. Ukraine attacked a Russian military target in Crimea overnight with missiles supplied by the US. Markets will be on high alert for additional attacks particularly if they include Russian ports resulting in disruptions to grain exports. Some light to moderate rains are expected by the middle of next week for drier areas in Southern Russia, eastern Ukraine and western Kazakhstan providing limited relief from recent dryness for the winter wheat. Russia lowered their export tax on wheat 4% to 2,977.30 roubles/mt for the period ending June 4th. Initial US crop ratings should be historically high.
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