Risk Off. Grain Futures Are Lower

MORNING OUTLOOK

Grains are lower. Risk off. SH is down 9 cents and near 15.28. SMH is near 497.6 BOH is near 60.05. CH is down 4 cents and near 6.78. WH is down 2 cents and near 7.83. KWH is down 3 cents and near 9.02. MWH is unch and near 9.31.

US stocks are lower. US Dollar is higher. Crude is lower. Gold, silver, copper, coffee, sugar and cotton are lower. Feels like bulls are being challenged today due to demand worries. Still no official word on if CFTC will release Commit of Traders report.

Soybean futures are lower. It is that time of the week that market is updated on demand. NOPA soybean crush should show increase in soyoil stocks suggesting lower demand. Brazil soybean harvest is advancing and farmers are selling soybeans. This continues to weigh on Brazil soybean export prices which are now 110 cents below US gulf. Weekly US soybean export sales May also drop below pace to reach USDA goal. 2023 could be a year of increase US carryout and lower US soybean export share of global trade. Trade est China soybean imports near 100.3 mmt vs 89.3 ly. Brazil 62.1 vs 55.1 ly. Argentina 6.1 vs 1.6 and US 30.0 vs 30.0. China has 29.5 US soybean export commit with 3.6 in unknown.

Corn futures are lower. 6.80-6.85 CH has proven strong resistance again. Brazil corn plantings are advancing under mostly good weather. Argentina crop problems and uncertain impact of Black Sea exports may be priced in for now. Weekly US soybean export sales may also drop below pace to reach USDA goal. 2023 could be a year of increase US carryout and lower US corn export share of global trade. USDA is estimating 24 mmt drop in global corn use do to higher global interest rate/cost and weaker importer currencies. Some estimate and 20 mmt increase in 2023/24 corn use but an increase in World production of 35 mmt which could result is a 14 mmt increase is end stocks. Some estimate a 5 pct increase in US 2023 corn trend yield to 185.0.

Wheat futures tend to be a follower. US HRW crop are is still dry. North Africa and Middle East import demand is declining. Lower Russia currency helps their wheat export prices to be below World competitors. Uncertainty over Russia and Black Sea export pace as Russia faces new sanction if they do not extended the Ukraine open export corridor deal. Increase Russia Ukraine offensive could also drop Russia crude oil price cap and increase West military aid to Ukraine. Weekly US wheat export sales remain below pace to reach USDA goal.  WH tested 8.00 on fund short covering but failed to push above. 7.50 is support. KWH has had a nice rally from 8.03 to 9.21 and is over the 20, 50 and 100 DMA. Need more US weather concern to push higher.