Grain Comments: 05-05-2023

Good morning:

The grains continue to creep off this week’s lows but look tired in doing so, with volume slow overnight as the week limps into the finish. The trade will very much be looking forward to the key May USDA S&D Report (including ’23/24) for fresh fundamental data a week from today.

Isolated rains fell in NE as well as OK and surroundings over the past 24 hours; more is expected in similar spots today, moving from NE into IA and from OK in the South and Southeast. Weekend rains shift north and east for solid five-day coverage overall. 6–10-day maps today favor the WCB and Plains (especially the southern Plains), with 11–15-day forecasts still dry; temperatures will remain safely above-normal over the next two weeks at least.

Nearly all interest in the market right now is on the US planting season. Seeding of both corn and soybeans is ahead of average even with several portions of the US seeing less than ideal conditions. The weather is expected to improve considerably for the next two weeks, which should allow for much of the crop to be seeded in an optimum time frame. A forecasted warm up will also be seen which will further benefit the new crops. These conditions are the primary reason private analysts have not reduced their production estimates much from what the USDA published in its Outlook Forum. The big question now is what the USDA will publish in its first official new crop balance sheets that will be released next Friday, May 12th. The unknown with this scenario and one that is causing our choppy trade is what we need to see for risk premium in the current market. This year’s crops of corn, soybeans, and wheat are all expected to be larger than last year. This is reducing the volume of risk premium that trade is willing to add to futures. Uncertain demand outlooks are further reducing risk premium. The next chance of seeing this buying develop right now would be a summer weather threat to US crops.

Have a great weekend!