Written Commentary
SOYBEANS
SN ended lower and near session lows. SN sliced through the 20 DMA and 50 DMA. Concern about global demand due to higher food and fuel prices tends to offer resistance to soybean and soymeal prices. Rallies are linked to concern about lower South America supplies and US weather slowing US plantings. Fact China is still on Holiday also reduced announcement of new US soybean sales. Range of analyst es of US 2021/22 soybean carryout is 175-249 vs USDA 260. Some could South America soybean supply down 5-6 mmt. Most look for US 2022 soybean crop near 4,600-4,685 and 2022/23 carryout between 175 and 250. Soybean open interest has dropped from a high of 863,000 contracts on Feb 10 to 699,000 today.
CORN
Corn futures ended lower and near session lows. Concern about global demand due to higher food and fuel prices tends to offer resistance to corn prices. Rallies are linked to US weather slowing US plantings. Although the 2nd week US Midwest weather looks drier which could allow US corn crop to be planted. Range of analyst estimates of US 2021/22 corn carryout is 1,220- 1,325 vs USDA 1,440. Most look for US 2022 corn crop near 14,650-14,800 and 2022/23 carryout between 924 and 1,225. US corn exports are down 16 pct from last year. US farmer selling is slow. Consumer demand should support prices. 14 pct US corn crop is planted vs 42 ly and 33 ave. IL 7 vs 43. IA 9 vs 42. MN 0 vs 28. Some could see South America corn supply down 12-13 mmt. Brazil is dry with some corn crop est near 107 mmt vs CONAB 115. Argentina harvest is 25 pct done. Some estimate Argentina corn crop near 49 mmt vs USDA 53. Ukraine war continues. Ukraine closed all captured Ukraine export ports. China is on Holiday. Continued buying US corn to replace Ukraine could help CN retest recent highs.
WHEAT
Wheat futures ended lower. WN is near 10.55 with a range of 10.44-10.68. Lower energy prices and grains suggest longs are liquidating positions in front of US Fed meeting. Some feel higher US rates could either slow the economy or a quick and large increase in rates could push US economy into a recession. US Wheat export demand continues to be slow and below last year. A few could even see USDA on May 12 continue to lower US exports and raise US 2021/22 carryout. US exports are down 19 pct vs ly. USDA kept US WW crop rating at 27 pct G/E and lowest since 1996. US spring wheat is 19 pct planted vs 46 ly. North plains forecast is wet. West Canada is dry, East prairies wet and cold.
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