Ag Market View for Apr 27.23

SOYBEANS

The soybean complex was mostly lower in choppy 2 sided trade.  This marks the 7th consecutive lower close for old crop soybeans.  The May/July spread remains quite volatile ahead of tomorrow’s first notice day.  Expect no deliveries in soybeans or meal, likely at least a few hundred in oil with registrations resting at 598.  Next support in May-23 soybeans in the Mch-23 low at $14.05.  May-23 meal held support above support at $420 before recovering to a gain of $2.  Spot oil dipped under $.51 lb. for the first time in just over 2 year.  The Monthly Biofuels Capacity & Feedstock update is after tomorrow’s close.  Key figure in that report will be the renewable diesel capacity.  Old crop export sales at just over 11 mil. bu. were well above last week, however in line with expectations.  YTD commitments at 1.860 bil. bu. are down 12% from YA, vs. the USDA forecast of down 7%.  With US prices still $90 – $100/mt over Brazil I do not expect the gap to be narrowed.  Look for exports to be cut 10 – 25 mil. bu. in the May-23 WASDE report.  The USDA’s Foreign Ag. Service expects Brazilian soybean acres to expand another 3.9% for the 2023/24 MY to 45.2 mil. HA.       

CORN

Prices were down another $.12 – $.20 today.  May-23 registering its 7th consecutive session.  China announced cancellation of another 233k tons of corn from the US, this on top of the 327k tons cancelled on Monday.  Export sales last week at 16 mil. bu. were at the low end of expectations.  YTD commitments are down 33% from YA, vs. the USDA forecast of down 25%.  Outstanding sales to China were 146 mil. bu. well below the 227 mil. from YA.  These will slip further once this week’s cancellations are factored in.  I sense the market fears further cancellations.  With US corn priced $30 – $35/mt over Brazil in the summer months I look for the USDA to lower their export forecast by 25 – 50 mil. bu. in the May-23 WASDE.  The May/July spread has added $.05 at midday in volatile trade.  Look for zero deliveries tomorrow.  Next support for May-23 is $6.18, the Mch-23 low on the weekly chart.  How low we go will be determined by when we start to uncover better demand, or weather becomes a bigger concern to new crop supplies.  Longer range maps continue to suggest a warmer/drier outlook the 2nd week of May.  Perhaps the corn market is getting a jump on a recent seasonal trend.  May has been a very negative month for corn prices the last 2 year.  After peaking in late April or early May, July corn has dropped over $1.00 bu. the past 2 years, bottoming in either late May or the 1st trading day in June.  To date July-23 corn is down $.67 from the mid-April high. 

Rural farm scene

WHEAT

Prices were lower in all 3 classes today with MGEX down $.20 – $.40, KC down $.14 – $.18, while Chicago is down $.12 – $.14.  Spot contracts for all 3 have fallen to new lows.  Chicago is at its lowest level since July-21, KC since Feb-22, and MGEX since June-21.  Overnight Ukraine and officials with the Joint Coordination center in Istanbul confirmed vessel inspections have resumed under the Black Sea Grain deal, continuing the on and off pattern for the past few weeks.  An extension beyond the May 18th deadline continues to appear unlikely.  Export sales at 13 mil. bu., (6 mil. old crop, 7 mil. new crop) were in line with expectations.  YTD commitments for old crop are down 3% from YA, in line with the USDA forecast.  Prices have obviously discounted improved conditions and crop prospects with the recent rain event in the southern plains.  Iraq purchased 150k mt of Australian wheat for $387/mt CF.  The USDA FAS in Algeria is also believed to have bought a small volume of optional origin milling wheat for $295/mt CF for delivery before Aug.  Australia expects wheat production to drop dramatically in 2023, down 10 mmt from YA to 29 mmt. 

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