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Grain Comments: 05.17.23

Corn was down from 4 to 10 cents in overnight trade, soybeans were 7-10 cents lower, and wheat was down 3-5 cents as liquidation continued on sparse fresh news. The US dollar, energies, and equities were all higher.

 

Today’s Reports: Weekly Ethanol Data, Housing Starts

 

  • KS wheat tour puts yield at 29.8 bpa, lowest since 2003
  • US consumer debt a record $17 trillion
  • Only 7 vessels left in Black Sea corridor

 

An underlying topic in the market that will start to be more closely followed is the capacity of Brazilian export terminals. At the present time these ports are running at full capacity as the country tries to load out both old crop corn and new crop soybeans. Exports of both of these are expected to slow in the month of May but this will be short lived. In June we will likely start to see the Safrinha harvest get underway, and exports will be quick to follow. Even with slight delays and congestion at most terminals we have not seen purchases shift to the US which is what trade had been expecting. In fact, just the opposite has happened with importers washing out of US purchases instead, primarily on corn. The wide price spread between their offers and those from the US are making this happen. As we move through the summer months Brazilian soybean exports will slow but corn loadings will remain high. The next probable window for higher US exports now is late August into September. This will do little to benefit old crop demand but could give us a big jump to start the new crop export program.

 

Highlights

* March US crude oil exports record high

* March exports average 4.5 million bbl/day

* Russian sanctions push crude demand elsewhere

* Ag ministers ask EU to expand Ukraine import bans

* Global fertilizer values level out

* SAM drought slow to end

* World balance sheets improving

* US basis values remain soft

* Importers passing on high offers

* US rivers open, barge traffic still congested

 

Corn

* Argentine harvest half complete

* Argentine basis not softening

* Brazil basis slipping lower

* US demand projections are questionable

* Corn/wheat spread widening

 

Soybeans

* Argentine meal exports -14% from last year

* Argentine now 39% of global trade

* Share of world market historically low

* Brazil soy values 90 cents off lows

* Brazil still over $1.50 under US

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