Written Commentary
MORNING AG OUTLOOK
Grains are lower. SN is down 2 cents and near 13.20. SMN is near 405.6. BON is near 47.82. CN is down 2 cents and near 5.75. WN is down 5 cents and near 6.16. KWN is down 8 cents and near 8.32. MWN is down 4 cents and near 8.16. US stocks are lower. US Dollar is higher. Crude is higher and near $74.27. There is some talk OPEC may make additional production cuts.
SN remains in a 13.04-13.40 range. Bulls point to dry US Midwest weather forecast, good domestic soybean crush margins and double bottom tech picture as supportive. For now, bears could have upper hand with large Brazil soybean supplies and export and fact China is buying Brazil vs US is offering resistance. Argentina is trying to ship soymeal. May exports could be 2 mmt but this is 20 year low. Asian vegoil prices are lower due to slower China demand and higher supplies. EPA is delaying including electric vehicles into the RFS.
CN remains in a 5.60-6.00 range and testing initial 20 day moving average resistance near 5.80. Managed funds are estimated to be net short 132,000 corn contracts into long holiday weekend. Next week could start the weather silly season with Midwest a little dry especially IA, MO and IL. Weekly US ethanol data will be key for corn demand. Due to Brazil logistic challenge with corn harvest starting and with soybean export continuing, US could get some new corn export business due to Brazil export challenges.
Wheat futures are mixed to lower. Recent bounce linked to talk of drier weather lowering final US, Canada, Australia and Russia 2023 wheat crop and fact technically, WN was oversold. Interesting that now parts of US HRW may be getting too wet and raising questions about quality. KWN has had a wild price ride in May from 7.36 to 9.18 back to 8.07 and now testing key resistance near 8.50. US export prices are still not competitive. Still a lot on unanswered questions about Ukraine corridor.
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