Grain Comments: 05-19-2023

Good morning:

A wet southern Plains and a dry Midwest will cap any rallies into the end of the week; the Dakotas remain the only real problem for spring planting, but progress should advance there as well up into early next week.

Rain fell in the southern Plains over the past 24 hours and remain there today, shifting mostly through far southern and eastern crop areas through tomorrow with most dry. Rain will hold west into the 6–10-day period with most of the Midwest dry, then everywhere remains dry for the 11–15-day forecast. Extended temperature forecasts stay warm right up into early June.

We are starting to see a shift in global commodity trade following the May supply and demand report. This is especially the case on corn and soybeans where the global stocks to use are forecast to increase considerably in the 2023/24 marketing year. The world corn supply is forecast to increase by 15.5 million metric tons (mmt) from this year to next. The global soybean supply is projected to increase by 20.5 mmt. These larger crops are reducing any urgency from importers to cover future needs, especially at today’s values. Buyers are also showing more restraint in booking wheat even though the global supply is forecast to shrink 2 mmt from this year to next. The question now is when these buyers may step in and start covering their import needs. It is quite likely the US will not see a jump in export demand until late summer when South American exports slow. It is possible we will not see demand until our next harvest takes place. This is especially the case on soybeans where the large Brazilian crop will generate longer lasting competition. One way the United States could see a quicker build in demand is from lower values, but the spread between the US and others will be more of a factor than outright bushel values.

Have a great weekend!