Ag Market View for May 19.23

SOYBEANS

The soybean complex was lower across the board.  July-23 soybeans quickly approaching last summer’s low at $12.99.   New low today for July-23 meal, next support $397, the Oct-22 low on the weekly chart.  Despite this week’s plunge in price, US soybeans remain $40 – $50 mt above SA supplies thru the summer months.  Spot board crush margins did rebound $.15 today to $1.13 bu.   Safras and Mercado raised their Brazilian soybean production forecast .6 mmt to 155.7 mmt, just above the USDA est. of 155 mmt.  The BAGE lowered their Argentine forecast another 1.5 mmt to 21 mmt, well below the USDA est. of 27 mmt.  Harvest is estimated to have reached 69%, down from YA and 5-year Ave of 85%.  Argentina’s Ag. Ministry lowered their soybean production forecast 2.2 mmt to 25.5 mmt.  The tightened inspections procedures in Chinese ports is causing port congestion and soybean shortages in certain domestic markets.  Inbound vessels are now taking upward of 20 days to clear customs, up from 3–5.  These new inspection procedures limited April-23 imports to only 7.26 mmt, well below expectations. 

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CORN

Prices were unable to hold the early morning gains, drifting back in sympathy with sharply lower wheat prices.  US prices remain $15 – $20 mt over SA supplies despite this week’s selloff.  With fresh news scarce, markets appeared to revert back to focusing on weak demand and mostly favorable weather.  US will experience below normal precipitation over the next week with the exception of the southern plains.  Temperatures will gradually build next week to above normal readings.  Favorable for finishing up plantings, however concerning if moisture doesn’t reemerge by late May/early June.  Ukraine’s Ag Minister reports grain plantings have reached 86% of the intended 5.5 mil. HA.  Overall acres are down from the 5.9 mil. HA from YA.  Corn plantings have reached 3.3 mil. HA.  BAGE kept their Argentine production forecast unchanged at 36 mmt, vs. the USDA est. of 37 mmt.  Harvest is estimated to have reached 25%, vs. 27% YA and 5-year Ave. of 34%.  Today’s Cattle-on-feed report showed cattle inventories as of May 1st were 97% of YA, in line with expectations.  Placements and marketing’s were also in line with expectations at 96% and 90% of YA levels respectively. 

WHEAT

Prices were lower to sharply lower in all 3 classes.  KC violated support at both its 50 and 100 day MA’s closing at its lowest level in 2 weeks.  Next support is $8.00.  Chicago July-23 traded to its lowest level in over 2 years.  Next support is $5.95 ½, the early May low on the weekly continuation chart.  SovEcon raised their 2023 Russian wheat production forecast 1.2 mmt to 88 mmt, well above the USDA forecast of 81.5 mmt.  At the conclusion of the Kansas wheat tour yesterday afternoon, participants forecast state production at 178 mil. bu. with an average yield of 30 bpa.  This compares to the USDA forecast from last Fri. at 191.4 mil. bu. with an average yield of 29 bpa. Implied harvested acres from the crop tour was 5.933 mil. well below the USDA est. of 6.6 mil. and implies abandonment at 27%.  The USDA is already assuming record abandonment at 18.5%.   

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