Ag Market View for Apr 13.23
The soybean complex was mixed as spot soybeans were down $.03, while new crop contracts were $.04 – $.06 higher. Soybean meal was up $2 – $3 in old crop, down $1 in new crop. Bean oil was down 30 – 40. May-23 soybeans traded under its 50 day MA support at $15.02, however held above the $15 level. The BAGE stated Argentine farmers sold 149k mt of soybeans on Wed. with their latest currency incentive program. This was well below amounts sold in the first day of the previous programs. The Rosario Grain Exchange lowered their Argentine production forecast by 4 mmt to 23 mmt, well below the revised USDA forecast of 27 mmt. Conab raised their Brazilian soybean production est. 2.2 mmt to 153.6 mmt, in line with the USDA’s 154 mmt forecast. The BAGE est. Argentina’s harvest has reached 4% however didn’t change their production forecast of 25 mmt this week. Overnight Chinese customs data showed total Mch-23 soybean imports at 6.85 mmt, while down 2.6% from Feb-23 was up 8% from Mch-22. In the first 6 months of the Oct thru Sept MY total imports have reached 45 mmt, up 5% from the previous year and in line with the USDA forecast. Seasonal trends suggest Chinese imports will surge in coming months. US export sales last week at 13 mil. bu. for old crop was disappointing. YTD commitments are down 11% vs. the USDA forecast of down 7%. Outstanding sales to China/unknown has slipped to 91 mil. bu., well below the 249 mil. from YA. .
Corn prices were down $.02 – $.04 with May-23 leading the declines. May-23 held its 50 day MA support at $6.51. Favorable weather and weak demand appeared to win out over lower Argentine production estimates and fears the Black Sea Grain Initiative will expire in mid-May. The warm/dry conditions across the nation’s midsection will come to a halt over the weekend. Cooler temperatures and scattered showers into early next week are not expected to lead to prolonged planting delays. Temperatures are expected to warm back to above normal levels by the middle of next week. The Rosario Grain Exchange lowered their Argentine production forecast by 3 mmt to 32 mmt, vs. the revised USDA forecast of 37 mmt. Like we saw in Tues. WASDE report any further cuts to USDA’s production est. will likely be equally offset by lower exports as Argentine ending stocks are already at historical minimums. Conab only raised their Brazilian production est. by .2 mmt to 124.9 mmt, just below the USDA’s 125 mmt forecast. With current conditions and a mostly favorable forecast I look for higher Brazilian est. in coming months. US export sales at only 21 mil. bu. were below expectations. The only noted buyer last week was Mexico with 11.5 mil. bu. YTD commitments are down 33% from YA, vs. the USDA forecast of down only 25%. The USDA did announce the sale of 327k tons (13 mil. bu.) of corn to China. 7.5 mil. bu. were old crop, with 5.5 mil. for the 2023/24 MY. These sales will show up in next week’s report.
Wheat prices were lower to sharply lower in all 3 classes. KC was down $.15 – $.18 while Chicago and MGEX were both $.09 – $.12 lower. KC May-23 broke thru support at both its 50 and 100 day MA’s. Its premium to Chicago has slipped another $.06 to $1.78, nearly $.25 off its recent peak. Some weather models have increased prospects for rain in the US southern plains in the extended outlook. Rainfall amounts are not expected to put much of a dent in the current drought pattern. Recent rains and favorable forecasts for the Black Sea region have improved crop prospects in Russia, Ukraine, and Kazakhstan. US exports at only 5 mil. bu. were below expectations. YTD commitments are down 5% from YA, vs. the USDA forecast of down 3%. Looking like the current USDA export forecast of 775 mil. bu. is 10 – 20 mil. bu. too high.
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