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Grain Comments: 05-14-2024

Good morning.

Markets are a bit of a mixed bag at the CBOT to start Tuesday. Soybeans are being led to the downside by bean oil, which is down nearly 3% at this writing, while corn trades higher and Chicago wheat futures catch their collective breath following yesterday’s run-up. Funds continue to cover shorts, but interestingly, open interest rose in all three major crops on Monday, meaning new buying is also coming into the space. Corn futures are trading 2-3 cents higher, soybean futures are trading 6-7 cents lower, and the Chicago wheat market is trading 2-3 cents lower. Products are mixed, soybean meal is up around $3/ton, while soybean oil is down 1.50/lb. Outside markets are quiet, crude oil futures are down 20 cents/bbl, the Dow Jones index is up 50 points, and the US$ index is unchanged.

Yesterday afternoon’s crop progress report showed corn planting progress as of Sunday May 12th had reached 49%; this was behind last year’s 60% rate, and also behind the five-year average of 54%. IL and IA continue to run well behind average.

Soybean planting has reached 35%, also behind last year’s pace of 45% but just ahead of the five-year average pace at 34%. IA, IL, MN, NE, and MI are the states that are most behind average.

Spring wheat was seen at 61% planted, nearly double last year, and winter wheat conditions were seen unchanged from last week at 50% in the g/ex category.

Planting operations in the Southern half of Iowa, as well as Missouri and Illinois, have been halted overnight, with satellite data showing 12-hour rainfall totals in a range of 0.5″ to 2.0″ across this area.

CONAB will be out this morning with their monthly crop update for May; the trade anticipates a slightly smaller corn crop estimate than last month at 112.4 mmt’s, while the soybean crop is seen increasing slightly to 148.3 mmt’s.

As of May 1, wheat stocks in India’s government warehouses were down 10.3% from last year and seen at their lowest level since 2008 following a sale of record volumes of reserves due to consecutive years of poor crop output. The sale was used to boost local supplies and lower prices.

The Biden administration overnight announced a bundle of steep tariff increases on an array of Chinese goods ranging from EV’s to medical products; the tariffs were anticipated, though it appears duties on Chinese used cooking oil were not adjusted, despite calls for such action from the soybean lobby.

This has led to the price decline in soybean oil futures this morning, as traders had positioned long in the last couple trading sessions in anticipation of the new tariffs.

Economists see this morning’s PPI number coming in at an increase of 0.3% from last month, after increasing by 0.2% in March. This, along with a speech from Fed Chair Powell this afternoon, will be the main features in financial markets on Tuesday.

The US Midwest weather pattern remains the same as Monday. Models continue to advertise storm systems every 2-3 days, with the pattern unable to change. The GFS/EU do not totally agree on exact amounts/locations but show the same general pattern.

Temps for the Midwest will have a cooler bias today and tomorrow, before returning to above average for most of the area by the end of the week.

Not a lot of change on the international side either; Southern Brazil will be wet for another week, while Argentina sees frost risk for most of the growing region over the next week.

Temps in Russia/the Black Sea continue to be significantly below average, with little/no precipitation seen for Russian wheat areas over the next week to 10 days. Frost worries persist here as well.

Have a great day!

 

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