TGIF. Grains Are Lower. Risk Off.

MORNING OUTLOOK

TGIF. Grains are lower. Risk off. SN is down 15 cents and near 16.31. SX is near 14.79. SMN is near 417.7. BON is near 80.28. CN is down 9 cents and near 7.88. CZ is near 7.27. WN is down 10 cents and near 10.96. KWN is down 12 cents and near 11.64. MWN is down 4 cents and near 12.05.

US stocks are lower following yesterday’s steep losses. Crude is higher and near $110. US Dollar is lower. Copper, silver, coffee, cocoa, sugar and cotton are lower. Headlines suggest US stock market selloff linked to margin call selling and fear China Covid lockdown will slow China and World economy. Inflation and higher rates could slow US food and fuel demand.

Trade watching a change in US weather. Rest of this week is wet. High pressure ridge forms across south half of US Midwest next week this should increase temps and reduce rain. US north plains remain wet. US Midwest corn farmer should see better corn plantings weather. US corn export commit is down 14 pct ly. Brazil and EU are dry. Argentina corn G/E rating dropped 3 pct to 16. Russia shelling east Ukraine rail and bridges to slow military aid. This also slows only route for Ukraine exports.

Soybeans, soymeal and soyoil futures are lower. There is new concern that China covid lockdown could slow their vegoil demand and soybean import demand. Dalian palmoil and soyoil futures are lower. Indonesia could open palmoil exports. End of April Malaysian palmoil stocks could be up 5 pct. US soybean export commit is near 2,143 mil bu vs USDA goal of 2,115. Argentina dropped their soybean crop rating 4 pct to 12 pct G/E. USDA May 12 2021/22 and 2022/23 will be next headwind for the soybean complex. US inflation will also be an influencer for feed and cooking oil demand.

Wheat futures are lower. Risk off commodity trade on demand concerns is weighing on commodity prices and wheat. Next week a ridge of high pressure will form across south half of US. This could stress US HRW crop. OK estimated their 2022 wheat crop at 57 mil bu or half of last year’s 115. US wheat export commit is down 24 pct vs last year. Matif wheat futures making new highs. Matif wheat futures are up 390 cents since Ukraine war started. EU could be key exporter of wheat until north hemisphere harvest. Key to wheat prices direction is US spring weather and if India bans wheat exports. Most feel they will eventually ban wheat exports.

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