Ag Market View for May 9.23

SOYBEANS

The soybean complex was lower across the board with soybeans down $.16 – $.20, meal down $6 – $9, while oil was 60 – 70 lower.  Next support for July-23 soybean is last week’s low at $13.92, followed by the March low of $13.84.  July-23 meal closed under $420 for the first time in 5 months.  While the gap has narrowed, US soybeans remain at a $55 – $65/mt premium to Brazilian supplies thru July.  US planting progress jumped 16% to 35% complete, in line with expectations and above the 5-year Ave. of 21%.  Big gains in IL, IA and NE last week.  Still concerns in ND with zero progress thru May 7th.  Chinese soybean imports in April-23 were 7.26 mmt, while up 6% from Mch-23, they are down 10% from April-22 and below expectations.  New custom procedures were blamed for this month’s low figure.  In the first 7 months of the Oct-Sept MY, Chinese imports are up 3% from YA, vs. the current USDA forecast of up 5%.  Thru May 5th the 3rd Argentine currency incentive program has generated 3.1 mmt of farmer soybean sales, below the 4.9 mmt in the Dec program, and 12.1 mmt in the Sept program.  Dr. Michael Cordonnier raised his forecast for Brazilian soybean 1 mmt to 154 mmt, in line with the current USDA forecast.  Conab forecasts production at 153.6 mmt, while harvest has advanced past 95%.  Stats Canada est. canola stocks as of Mch 31st at 5.948 mmt, above YA however well below expectations of 6.9 mmt. 

 

soybean field at sunrise

CORN

Prices were down $.10 – $.14.  Crops are going in at a good pace, drought areas are shrinking, demand is weak, and traders are bracing for bearish new crop balance sheets from the USDA in Friday’s report.  Support for July-23 is at last week’s low of $5.69 ¼, and Dec-23 at $5.12 ½.  Planting progress advanced 23% to 49%, in line with expectations and above the 5-year Ave. of 42%.  Big advancements in IL, IA, MN, NE and SD.  Some concern with ND at only 1% vs. 11% Ave. and MI at only 6% vs. 18% Ave.  China cancelled another 272k tons of corn (11 mil. bu.) purchased from the US.  This brings known cancellations to 832k (33 mil. bu.) in just over 2 weeks.  Dr. Michael Cordonnier raised his forecast for Brazilian corn 1 mmt to 124 mmt, still just below the current USDA forecast of 125 mmt.  Mch. 31st corn stocks in Canada at 9.075 mmt are below the 9.28 mmt from YA.

WHEAT

KC and MGEX rallied the last hour of trade enabling both to close higher on the day.  KC led with gains of $.08 – $.12, MGEX was up $.03 – $.04, while Chicago was $.06 – $.10 lower.  KC July-23 inverse to Chicago surged $.22 today closing at a new high of $2.12 ¾.  Today’s close in July-23 KC was the highest in 3 weeks.  US winter wheat ratings did improve 1% in G/E to 29% (matching YA) however, poor/VP rose 2% to 44% vs. 39% YA.  The winter wheat CC index slipped to 71.9 below the 72.2 from YA and the lowest in 20 years of data I have available. My estimate for 2023 WW production slipped to 1.264 bil. with an average yield of 44.1 bpa.  YA production was 1.10 bil. with an average yield of 47 bpa.  Spring wheat plantings advanced 12% to 24% complete, below the 26% pace from YA and the lowest in over 10 years.  ND advanced only 4% to 10% complete, vs. the Ave. of 27%.  The UN confirmed today that outbound vessels from Ukraine have resumed operations in an effort to clear the Black Sea before the May 18th deadline.  High level talks to renew the grain deal will take place in Istanbul on the 10th and 11th.  Stats Canada est. wheat stocks as of Mch 31st at 13.26 mmt, up from 11.22 mmt YA, however below expectations of 14.0 mmt.                

 

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