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Grain Comments: 05-15-2024

Good morning.

The choppy trade at the CBOT continues, as ag markets are higher in the overnight session. Weather, both on the global front as well as in the US, continues to be the main driver of futures prices. This morning’s NOPA crush report will provide the soy markets with tradable data today, with wheat prices likely being influenced by the ongoing crop tour across Kansas. Corn looks to be stuck in between with the trade almost entirely focused on planting progress that has again been delayed for a lot of the Corn Belt this week. Corn futures are 3-4 cents higher; soybean futures are 5-6 cents higher, and the Chicago wheat market is up 10-15 cents. Products are higher, soybean meal is up around $2/ton, and soybean oil is up 10-20 points. Outside markets are again quiet to start the morning, crude oil futures are down 40-50 cents/bbl, the Dow Jones index is unchanged, and the US$ index is down 20 points.

Today’s NOPA crush report for the month of April looks to show soybean crush at 183.072 mil bu’s, which would be a record for the month. This would also be up roughly 6% from April 2023. Inversely, this would be the smallest monthly crush total since last September.

Soybean oil stocks for April are seen at 1.882 bil lbs., which is up roughly 2% from March, but 4% lower than last year.

Also out today is the weekly ethanol report, which is expected to show daily production in a range of 955-985k bbls; this would be in-line with previous weeks. Stocks are seen between 23.2 and 24.5 mil bbls. At the low end, this would be the lowest stocks number since last December.

Scouts from the Wheat Quality Council’s HRW wheat tour projected the day 1 yield at 49.9 bpa. This is well above last year’s day 1 estimate of 29.8 bpa, and also above the 5-year average of 42.7 bpa. Scouts observed fields mostly in Northern KS on day 1.

In a weekly report, Brazil exporter lobby ANEC sees soy exports in May reaching 14.13 mmt’s, compared with their previous estimate of 13.21 mmt’s. Corn exports are seen at 828,159 mt’s vs 548,480 mt’s previous, and soybean meal exports are seen at 2.43 mmt’s vs 2.34 mmt’s previous.

The French ag ministry said Tuesday they see Spring barley and corn plantings both rising y/y. Barely area is seen up 12.2% from last year, while corn area is seen up 9.6% from last year. The soybean area is seen down 5.5%.

This morning’s much anticipated CPI report is expected to show the monthly core rate easing to 0.3% from 0.4% last month, while the headline rate is seen holding steady at 0.4%. This would bring annual inflation back down to 3.6% vs 3.8% in March.

Argentina announced its 6th interest rate cut under President Javier Milei on Tuesday, bringing the rate from 50% down to 40%. The rate peaked at 133% last December.

Monthly inflation also continues to slow in the South American country, with April’s reading coming in at 8.8%, compared to the December peak of 26%. Annual inflation in April was still seen at 289.4%.

The Corn Belt will be mostly dry on Wednesday, with just one system seen bringing moisture to areas of the Dakota’s and Minnesota in the North. Scattered showers become more widespread in Texas and the South between now and Thursday night, with a system dragging towards the East Coast into the weekend.

Beyond here, the EU model sees another smaller disturbance popping up over the Central Midwest early next week, with a subsequent system seen in the same area at mid-week. The active pattern looks to continue for at least for another 7-10 days.

Temps will continue to be a mixed bag for the next couple days before warm air generally moves into the Midwest by the weekend. A warmer bias will then be seen for the Eastern half of the US into next week.

On the international front overnight, Russian wheat areas will continue to be cold over the next 10 days, but the EU model does see a potentially wetter bias in the same time period, which would be positive.

For South America, no change to the precipitation forecast but the temperature outlook has returned to more warm air for both Brazil and Argentina in the next 10 days. Heat will be welcome in Argentina following a week of frost concerns.

Have a great day!

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