Written Commentary
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June 1, 2023
MORNING AG OUTLOOK
Grains are higher. SK is up 9 cents and near 15.14. SX is up 6 cents and near 13.25. SMK is near 464.6. BOK is near 56.54. CK is up 5 cents and near 6.66. CZ is up 4 cents and near 5.70. WK is up 10 cents and near 7.02. KWK is up 14 cents and near 8.91. MWK is up 11 cents and near 9.07. US stocks are mixed to lower. Crude is higher and near $79. Did test $81 overnight. Gold, silver, copper and cocoa are lower. Coffee, sugar and cotton are higher.
USDA March acreage and stocks report was bullish nearby corn and bearish new crop. US old crop corn supply is tight with farmers holding on to stocks until they get the 2023 corn crop planted. US Midwest weather suggest warmer and drier weather after April 11. Just in time to help corn planting. Some feel final US 2023 corn acres could end up lower than USDA March estimate. The Brazil forecast remains warm and dry which could stress the safrina corn crop. China continues to buy US corn. Despite higher US 2023 corn acres intention focus on weather could help CZ test 6.00-6.20.
SK jumped over 15.00 after USDA March 1 soybean stocks were lower than expected suggesting USDA est of US 2022 soybean crop was overstated. SK flew through resistance from 14.81 to 15.02. USDA est of US 2023 acres were also lower than expected. Most of the drop in acres were in central Midwest. There has been talk of switching of Argentina soybeans for China to US. These beans are for the reserve. China buys Brazil soybeans for crush. Brazil could export a record amount of soybeans in 2023/24. Hightower did a good job in last weeks newsletter showing a chart that there has been 5 years in which US ending stocks to use ratio has been tighter than 2022/23. 4 of those years SN-SX continued to trade higher from +245 to +532 in 1972. SN-SX is now at new highs for this year and at +189.
Wheat futures are higher. MWK is near 9.07 after US estimated 2023 spring wheat acres lower than expected. US north plains weather forecast remains cold and wet. KWK is near 8.91 vs Chicago 7.02. Dry US south plains will continues to at least April 10. As of March 28, Managed funds increased their net Chicago wheat short. KC weekly chart resistance is near 9.21. Daily chart resistance is 8.93. There remains uncertain outlook for pace of Russia wheat exports with domestic Russia wheat prices low and stocks record high.
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