Written Commentary
MORNING OUTLOOK
Grains are higher. SH is up 12 cents near 13.68 and near contracts highs near 13.78. SMH is near 434.5. BOH is near 43.87. CH is up 3 cents and near 4.97. Contract high is near 5.02. WH is up 6 cents and near 6.48. KWH is unchanged and near 5.99. US stocks are higher. US Dollar is higher. Crude is higher.
For the week, SRW Wheat prices are up roughly 8 cents; HRW down 3; HRS up 7; Corn is up 11 cents; Soybeans up 52 cents; Soymeal up $4.00, and; Soyoil up 130 points. Crushing margins were down $0.29 at $0.71 (March); Oil share unchanged at 33%.
Chinese Ag futures (May) settled up 30 yuan in soybeans, up 19 in Corn, up 8 in Soymeal, up 92 in Soyoil, and up 140 in Palm Oil. Malaysian palm oil prices were up 3 ringgit at 3,820 (basis March).
There was talk of China interest in US July-Aug soybeans. US FOB soybean basis is near +45 vs Brazil July at +86 and Aug +130. Argentina is talking about dropping corn export suspension. N Africa corn buyers are looking for Black Sea corn. Lack of Russia wheat export prices may offer support to US prices. US wheat export prices are competitive to EU. Traders will be watching to see if USDA next week lowers their estimate of Russia wheat exports near 40 mmt. EU wheat export pace is near 32 mmt vs USDA 26 but they will need to slow soon. US south plains dryness is expanding.
All Wheat sales are running up 10% versus a year ago, shipments down 1%, with the USDA currently forecasting a2% increase. Corn is up 137%, shipments up 72% (USDA up 49%). Soybeans up 84%, shipments up 78% (USDA up 31%), Soymeal up 6%, shipments up 17% (USDA unchanged) and Soyoil up 15%, shipments down 33% (USDA down 3%)
In Brazil, conditions will still be favorable for crops in most of the nation. There will still be some pockets that are drier than preferred from Rio Grande do Sul into Parana and greater rain will be needed in this area later in the month to prevent crop stress from becoming serious.
A notable rain event will still occur in Argentina due to a frontal boundary Sunday into Tuesday. Rain from this will likely be greatest in west-central and northern Argentina. Last evening’s GFS model was still aggressive with rainfall in east-central Argentina, such as Entre Rios and southern Santa Fe, which differs from the European Model that has been showing much less in this particular area.
Argentina rated their soybean crop 27 pct G/E vs 42 last week and 52 ly. 22 pct of crop is blooming vs 38 average. Argentina corn is rated 12 G/E vs 55 ly. 29 pct of crop is pollinating vs 43 ly. Soils are rated 51 pct adequate vs 71 last week and 94 ly. Some feel South America corn crop is 10-15 mmt below USDA report.
On Thursday, Managed funds were net sellers of 5,000 SRW Wheat; sold 5,000 Corn; net sold 12,000 Soybeans; sold 5,000 lots of Soymeal, and; sold 2,000 lots of Soyoil. We estimate Managed Money net long 37,000 contracts of SRW Wheat; long 389,000 Corn; net long 252,000 Soybeans; net long 99,000 lots of Soymeal, and; long 129,000 Soyoil.
Preliminary Open Interest saw SRW Wheat futures down roughly 3,200 contracts; HRW Wheat up 1,400; Corn up 24,300; Soybeans down 945 contracts; Soymeal down 1,000 lots, and; Soyoil down 200.
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