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Grain Comments: 04-27-2023

Overnight trade was weaker with corn 3-5 lower, soybeans 8-10 lower, and wheat down 8-10. The US dollar was steady while the energies and equities were firm.

 

Today’s Reports: Export Sales, Jobless Claims

 

  • Ethanol production under needed volume for 9 weeks
  • Poor Ukraine grain quality leads to more import bans
  • Corn, soybeans, wheat all at oversold levels

 

 

We will again see considerable attention on today’s weekly sales totals. The most interest this week will fall on corn to see if cancellations surface. In last week’s report we had cancellations on corn and since then China washed out of a large 327,000 metric tons of purchases. Corn exports have struggled all year and this is only making the situation more bearish. These cancellations make it very unlikely the United States will reach its yearly export projection on corn of 1.85 billion bu. To see this number trimmed in future balance sheet updates would not come as a surprise. Current data would suggest yearly corn sales are 50 to 75 million bu too high. These cancellations also indicate importers are less concerned over the South American corn supply going forward, even with losses in Argentina. If these losses do support US demand it will be more of a new crop demand for the US, and we are still projected to produce a large crop. Trade will also be monitoring soybean sales as demand for that commodity has slowed as well. Earlier in the marketing year there were concerns that US ending stocks would drop to historically low levels. There are now thoughts we could see our ending stocks increase as the year progresses.

 

Highlights

* Weekly gasoline demand +11.6% from last week

* Gasoline demand +8.8% on the year

* Weekly gasoline use highest in 16 months

* Weekly ethanol production -399,000 barrels

* Ethanol stocks -987,000 barrels on the week

* US diesel costs half of last year

* US Fed Reserve meets next week

* 25-basis point rate hike expected

* Russia not negotiating on corridor

* Shippers not sending vessels into Black Sea

 

Corn

* Brazil corn may replace US sales

* China covering needs from Brazil

* EU YTD corn imports +72%

* US planting may fall below average

* Emergence likely to slow

 

Soybeans

* More US imports likely

* EU soy imports YTD -12.5%

* US meal values lowest in 5 months

* Crush margins continue to soften

* New crop basis much better

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