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Grain Comments: 05.10.23

Corn was 4-6 cents lower overnight, soybeans were down 6-8 cents, and wheat was 6-8 cents lower as long liquidation and new selling took place. The US dollar was higher while the energies and equities were under pressure.

 

Today’s Reports: Ethanol Data, CPI

 

  • No debt ceiling agreement
  • China/Russia trade +41.3% this year
  • China has cancelled 33 mbu US corn in 2 weeks

 

The US farmer is currently focused on spring planting and fieldwork and this has slowed country selling which is not uncommon. Even with this decline in farmer selling basis values across the interior market have remained mostly steady as export bids are not competing for bushels at this time. The US remains uncompetitive with South America, and this is pressuring export basis, especially with the US importing soybeans from Brazil. Not only is the marketing of old crop inventory slowing, but US farmers have also been slow to sell much new crop either. Most elevators report having purchases of just 10% of their expected new crop deliveries. This is from farmers expecting to see futures rebound on hopes of elevated new crop demand once South America depletes their exportable bushels. While this is possible, the volume of new crop demand may be lower from an overall increase in South American production. Farmers in Brazil have also been slow to market their soybean inventory this year. Brazil farmers have sold an estimated 51% of current production compared to 61% last year and the normal 67%. These sales are expected to increase as storage becomes tighter once the Safrinha harvest begins. Sales of next year’s Brazilian soybean crop are also light with just 6% of the crop marketed, one-third of the normal volume.

 

Highlights

* Weak peso limits Argentine sales

* Argentine peso lowest value since 2016

* Global fertilizer values steady

* US ethanol values -6 cents/gal past week

* US DDG values -$20/mt past week

* Delta flooding to impact production

* Russia continues to push for total sanction removal

* EU considers more Russian sanctions

* EU wants Russian military companies sanctioned

* US farmers holding off on new crop sales

 

Corn

* US exports 100 mbu too high

* US 23/24 carryout est 2.37 bbu

* EU bans Ukraine imports until June 5th

* Global corn trade patterns changing

* Domestic demand countering slowing exports

 

Soybeans

* US 23/24 carryout est 440 mbu

* Strong US crush offsetting slower exports

* Jan-April Chinese imports +6.8% on the year

* China’s total demand may be overestimated

* EN bans Ukraine oilseed imports for 1 month

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