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Grain Comments: 05-09-2024

Good morning.

Markets are mixed to start the final day of trade ahead of tomorrow’s USDA data. Thursday looks to be a mostly technical trading day, with fund managers putting the finishing touches on their positions for tomorrow and longs taking what profits they’ve made this week to the bank. Traders all assume a bearish report on Friday, which is usually when the market will give just the opposite. Corn futures are trading either side of unchanged, soybean futures are trading 3-4 cents lower, and the Chicago wheat market is up 9-10 cents. Products are mostly lower, soybean meal is trading around $1/ton lower, while soybean oil is down around 20 points. Outside markets are mixed, crude oil futures are up 50-60 cents/bbl, the Dow Jones index is down 100 points, and the US$ index is up 15 points.

This morning’s weekly export sales report is expected to show corn sales in a range of 600k-1.1 mil mt’s, soybean sales in a range of 250k-800k mt’s, and wheat sales in a range of 100k-600k mt’s.

The Rosario Board of Trade in a monthly report published Wednesday said they had cut their forecast of Argentina’s corn crop to 47.5 mmt’s. This is down from their March estimate of 50.5 mmt’s, and down from their January estimate of 59 mmt’s.

The board cited the spiroplasma bacteria that was being spread by leafhoppers as the main reason for the cut, estimating the bacteria had trimmed roughly 20% off Argentina’s corn crop. They did not change their soybean estimate.

The board also mentioned corn harvest progress had reached 25%, while soybean harvest had reached 44% for the nation. Both were slower than average.

According to Chinese customs data, soybean imports for the month of April were seen at 8.572 mmt’s; this was up 18% from April of 2023, and was a record total for that specific month.

Data also showed total Chinese exports were up 1.5% y/y through last month, while total imports increased 8.4%. The import increase was nearly double what analysts had anticipated.

According to the Brazilian Trade Ministry, soybean exports for the month of April were seen at 14.669 mmt’s, which was up 2.5% from April of last year. Corn exports were seen at 66k mt’s, down 86% from the same month last year.

Also of note, soybean meal exports for the month were seen at 2.369 mmt’s, which was up 45.8% from the same month last year.

Brazilian ag consultancy ANEC sees soybean exports in May reaching 13.21 mmt’s vs 14.43 mmt’s in May of 2024. Corn exports are seen at 548.5k mt’s vs 493.5k last year. And soybean meal exports are seen reaching 2.34 mmt’s vs 2.28 last year.

The group also notes in their weekly update that exporters may have to redirect grain exports to avoid Rio Grande Port, which has been impacted by flooding.

The Bank of England unsurprisingly left interest rates unchanged this morning for the sixth meeting in a row at 5.25%. Some economists had thought the BOE might actually cut rates today, but this was not the case.

Financial markets this morning will be driven by this, as well as weekly jobless data out of the US that will add to the economic picture.

One final storm system impacts the Eastern Corn Belt today into Friday, before drier weather emerges through next week. The South/Southeast will be the wettest area in the US next week.

Temperatures will be cooler today and Friday, before warmer air returns over the weekend and into next week. Two-week forecasts continue to advertise a period of above average temps beyond mid-month.

South American forecast continues to be unchanged, with no updates to the overnight runs. RGDS continues to be too wet, while the remainder of Brazil sees nearly zero moisture. Argentina sees frost risk for a majority of the growing areas in the next week.

Have a great day.

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