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Grain Comments: 05-17-2024

Good morning.

Markets are adding weather premium to end the week, with wheat and soybeans the two upside leaders to start the last day of the week. Continued concern over less-than-ideal weather in Russian wheat areas, as well as too much rain in the Eastern Corn Belt, has kept a floor under prices for most of this week. As has been the case of late, traders in the ag markets will have their attention on today’s Commitment of Traders report, which is expected to show more short covering occurred in the last week. Corn futures are trading around a half cent lower, soybean futures are trading 6-7 cents higher, and the Chicago wheat market is up 2-3 cents after being up 10+ earlier in the overnight. The products are also green, soybean meal is up $2-3/ton, and soybean oil is up 20-30 points. Outside markets are mostly higher as well; crude oil is trading 10-20 cents/bbl lower, the Dow Jones index is up 20 points, and the US$ index is up 30 points.

The Buenos Aires Grain Exchange late Thursday afternoon trimmed their estimate of the Argentine soybean crop to 50.5 mmt’s, down from their previous estimate of 51 mmt’s. Harvest was seen 63.7% complete.

The same group left their corn production estimate unchanged at 46.5 mmt’s, while estimating harvest at 25.4% complete. This is roughly 8% behind the five-year average.

The Wheat Quality Council’s three-day HRW wheat tour in Kansas wrapped up yesterday; day three yield was estimated at 57.3 bpa, with a final combined yield estimate from all three days at 46.5 bpa. This led to a production estimate for the state of 290.4 mil bu.

This compares to the latest US balance sheet update, which pegged the Kansas crop at a yield of 38 bps, and total production at 268 mil bu.

This news took back seat though to rumors that Ukrainian drone had struck a port and fuel terminal in Russia which caused multiple explosions and a fire. Local authorities claimed the attack was unsuccessful, but this caused Chi wheat futures to pop.

And the last bit of wheat news includes Russian officials increasing their estimate of crop area affected by frost from 500k ha’s to 830k ha’s.

According to local Brazilian crop agency Emater, soybean harvest in Rio Grande do Sul reached 85% in the past week, up from 78% last week. Corn harvest in the state advanced 2% to 88% complete.

US Fertilizer maker Nutrien sees corn acres at 87 mil, below the USDA’s forecast of 90 mil. The group cites switches to soybeans and cotton as the main reason for its estimate, saying, “We have a unique lens into the market because we’re working with growers, 600,000 of them.”

Barge shipments down the Mississippi River for the week ending May 11th increased to 490k tons, up 16.4% from the previous week. Corn shipments of 384k tons were up 13.6%, and soybean shipments of 90k tons were up 63.6%.

No weather updates overnight as the pattern for the Midwest through next week remains the same. 24-hr satellite rainfall total maps show more heavy precipitation fell in E TX, while scattered totals of 0.1 to 1″ were seen across MO/IL/IN.

The Eastern half of the country into the East Coast will see rain on Friday, before most of the Midwest will be dry into the first part of next week. Beyond here, the EU and GFS both agree on a return to more storms by the middle of next week.

Temps in the South will be slightly cooler due to cloud cover today, before warm air returns to most of the Eastern US by the weekend and remains into next week.

Models continue to fluctuate with regards to rainfall in the Black Sea region/Russia. The EU today is drier than yesterday’s runs in the 10-day period. Temps here continue to be seen below average.

No change for South America, as the pattern remains stuck. Inundating rains continue to batter RGDS in the far South, while Central Brazil is dry. Argentina continues to see frost fears, with no change seen on the temperature front either.

Monday afternoon’s planting progress update will be closely watched by the ag trade.

Have a great weekend!

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