Ag Market View for Apr 28.23
The soybean complex was higher across the board today. Soybeans were up $.08 – $.18, meal $3 – $7 higher, while oil was up 65 – 85. There were no deliveries against soybeans or meal. Deliveries against soybean oil were 199 contracts. Late yesterday the BAGE reported Argentine soybean harvest had reached 28% up from 17% LW. While they left their production forecast unchanged at 22.5 mmt, however implied additional reductions were likely. So far Argentine farmers have sold 1.725 mmt of soybeans as of April 26th in response to the Govt. 3rd currency incentive program. This is down from 3.38 mmt at this stage of the 2nd program in Dec-22, and well below the 8.02 mmt sold in the Sept-22 program. Soybean oil usage in the production of biofuels reached 910 mil. lbs. in Feb-23, while down 3% from Jan due to fewer days, it was up 22% from Feb-22. In the first 5 months of the 2022/23 MY soybean oil usage has reached 4.585 bil. lbs, up 11% from YA, vs. the USDA forecast of up 12%. Bean oil usage for biofuel production is gaining quickly over the YA pace as additional renewable diesel production comes on line. Biodiesel and renewable diesel capacity has swelled to 5.323 bil. gallons as of the end of Feb-23, up from 4.944 bil. at the end of 2022, and up 59% just from the end of 2021. Despite this week’s selloff US soybeans remain $90/mt over Brazil which will continue to limit US exports.
Prices were mixed with old crop $.04 – $.09 higher, while new crop contracts were $.02 – $.03 lower. While there were no new export announcements, there were no additional cancellations to China. No deliveries against May-23 contract. With the Black Sea Grain Initiative set to expire on May 18th and the chances of an extension unlikely, there appears to be a rush of inspections to clear vessels from the Sea over the next 3 weeks. Despite the recent plunge US corn is still priced $25/mt over Brazil in the summer months and roughly $20 over Argentina for May/June. Look for the USDA to lower their export forecast by 25 – 50 mil. bu. in the May-23 WASDE. The BAGE kept their Argentine corn production est. unchanged at 36 mmt. Harvest progress advanced only 3% to 17.5%. This AM the EPA issued a waiver allowing the sale of E-15 gasoline during the summer months. I’ve been arguing the recent ethanol production rate was not on pace to reach the USDA corn usage forecast of 5.250 bil. bu. The warmer/drier outlook across the Northern plains is just what that area needs to get plantings in gear and reduce fears of large amounts of prevent plant.
Prices were higher across the board all rebounding from being deeply oversold. KC and MGEX were up $.10 – $.20 while Chicago was $.04 – $.05 higher. There were no deliveries against KC wheat, while deliveries against Chicago were 854 and 104 against MGEX. With the recent price plunge US SRW wheat has become the world’s cheapest. We’ll see if some demand materializes as a result. While much of the southern plains received its best rain in months this week, areas in both TX and OK panhandles were shortchanged with general .50 – .75” totals. I’d still expect a noticeable improvement in crop conditions next Monday. Little to no additional rains is seen for the Southern plains for the next week to 10 days.
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