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Grain Comments: 05-10-2024

Good morning.

Markets are higher to start in anticipation of today’s data led by wheat futures. Continued concern over cold weather in Russian wheat producing areas has fund traders continuing to cover shorts in the overnight market. Not to be lost in today’s shuffle will be this afternoon’s COT report, which will likely show another large week of buying across the ag space. Corn futures are trading 2-3 cents higher, soybean futures are trading 1-2 cents higher, and the Chicago wheat market is up 8-13 cents. Wheat is roughly a dime off its highs. Products are higher, soybean meal is up $1-2/ton, and soybean oil is up around 30 points. Outside markets are in the green as well, crude oil futures are up 30-40 cents/bbl, the Dow Jones index is up 100 points, and the US$ index is up 5 points.

According to the Russian Ag Ministry, regions effected by severe frosts this May will be able to replant the crops that were destroyed. Reports from the affected regions have not specified which crops have been affected the most.

The Buenos Aires Grains Exchange released their weekly crop update late Thursday; the report showed soybean harvest progress reached 47.8%, while corn harvest had reached 23.4%. Both continue to run behind average. The Exchange made no updates to production estimates.

Also, of note out of the weekly report, the Exchange sees Argentina 2024/25 wheat production increasing by nearly 20% to 18.1 mmt’s. Recent rains that have recharged soil moisture is the reason cited for the increase.

China’s Ag Ministry sees corn imports in the 2024/25 season falling by roughly 33%, while soybean imports are seen dropping by a much more marginal 1.6%.

Operations around the Rosario Port look to again be shuttered on Friday as oilseed workers strike for the second day over harsh austerity measures implemented by President Milei.

Bunge announced it has suspended operations at its Rio Grande and RGDS soybean crushing plants amid forecasts for more rain and recent flooding. The company said the decision was taken as a precautionary measure, and operations would remain halted until a safe return was possible.

Brage shipments down the Mississippi River for the week ending May 4 were down 4.8% from the previous week at 421k tons. Corn shipments at 338k tons were up 5.6%, while soybean shipments of 55k tons were down 43%.

Financial markets look to end the week on a positive note, as yesterday’s jobs data added fresh support to the case of possible Fed rate cuts. Next week will be driven by US inflation data.

US President Joe Biden is set to announce a new list of Chinese tariffs as early as next week, which look to target EV’s, batteries and solar equipment according to people familiar with the matter.

Israeli tanks have effectively encircled the Eastern half of Rafah in Southern Gaza overnight, despite warnings by President Biden that arms shipments would stop should the IDF attack Rafah.

Weather models are mostly unchanged again overnight. Both the Eu and the GFS model have turned slightly wetter for next week, but confidence is low. Temps will be cooler in the South and East generally through the weekend, before becoming more normal next week.

Extended forecasts are having trouble with the placement of a Western ridge, which effects moisture flow out of the West Coast. The intensity of this ridge will determine precipitation amounts for the Midwest into the end of May.

South America remains in the same pattern. Heavy rains are seen in RGDS in Southern Brazil, while the rest of Brazil is dry. Temps remain cold for most of Argentina’s growing regions.

Have a good weekend!

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