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Grain Comments: 05-20-2024

Good morning.

Ag markets are in the green to start a new week at the CBOT. Wheat futures are again the upside leader on continued concern over Russian/Black Sea weather, with this week’s upside target again being the $7 level. This afternoon’s planting progress update will be the key data point on Monday, as good, but somewhat scattered progress was reported over the weekend. Otherwise, this week looks to be more of the same with weather forecasts both in the US and globally being the main driver of price. Corn futures are trading 3-4 cents higher, soybean futures are trading 5-6 cents higher, and the Chicago wheat market is trading 16-18 cents higher. Wheat futures are near their overnight highs. Products are higher, soybean meal is up 50 cents/ton, and soybean oil is up 10 points. Quiet start to the week in the outside markets, crude oil is down 20-30 cents/bbl, the Dow Jones index is up 20 points, and the US$ index is up 10 points.

Friday afternoon’s commitment of trader’s report showed for the week ending May 14th managed money traders were buyers of 31,342 combined contracts of corn futures/options; sellers of 1,212 combined contracts of soybean futures/options; and buyers of 14,109 combined contracts of Chicago wheat futures/options.

Managed money is now seen short 71,171 contracts in corn, short 42,665 contracts in soybeans, and short 28,251 contracts in Chicago wheat.

According to Chinese customs data, Corn imports for the month of April were up 17.6% compared to same month last year at 1.18 mil tons. YTD imports were up 6.5% at 9.08 mil tons.

International grain handler Cofco announced last week that they had loaded their first shipment of certified deforestation-free Argentine soymeal for shipment to the EU.

According to Cofco officials, Argentina’s Visec certification platform has made the country “well-placed to supply Europe with EUDR-compliant soybeans.”

US federally inspected beef production in the week ending May 18th was down 3.7% from last week at 507 mil lbs., while pork production was up 0.9% at 518 mil lbs. YTD beef production is down 2.1%, while pork production is up 0.1%.

French wheat conditions were unchanged on the week in the g/ex category, coming in at 64% as of May 13th. This compares to the same week last year at 93% g/ex. Corn planting is seen at 72% complete, vs 85% complete a year ago.

The Russian wheat situation continues to be a moving target; officials from the Ag Ministry now see roughly 900k hectares of wheat area needing replanted, up from their estimate of 830k hectares last week.

Metals markets continue to run to the upside to start the new week; gold, silver, and copper futures have all made new contract highs in overnight trade Monday, while platinum is trading its highest level in more than a year.

Perhaps the biggest headline news overnight, though not necessarily ag-related, was word that Iran’s President Ebrahim Raisi was killed in a helicopter crash along with his Foreign Minister.

According to sources, the helicopter carrying the two, as well as six other passengers, crashed while trying to cross the mountains near the Azerbaijan border due to blizzard like conditions. Iran’s Supreme Leader has approved Vice President Mohammad Mokhber as interim President, with the country set to hold an election in the next 50 days.

Financial markets look to be somewhat quiet this week, at least on the data front; a slew of mostly second-tier economic data is on the docket, with the most notable point being the minutes from the May FOMC meeting, due out Wednesday afternoon.

The container ship that hit the Francis Scott Key Bridge in Baltimore, MD is expected to be refloated and moved to a nearby dock during high tide on Monday.

Weekend weather was a bit of a mixed bag across the Midwest; areas of MO/IL/IN/MI/OH/KY saw mostly dry conditions with isolated pockets of precipitation, while Western areas of KS/NE/IA saw more widespread rainfall. The Northern third of the Corn Belt also had light precipitation over the weekend.

Scattered storms will make their way through the Northern Corn Belt and Great Lakes States on Monday, with another system seen moving out of the Plains and into the same area Tuesday into Wednesday. Both the EU and GFS models see totals of 1-4″ for nearly all of MN, into NE/SD through the end of this week.

Overall, there was not a lot of change in the general pattern the last 48 hours; low pressure troughs continue to drive through the country bringing storms/rainfall with them. The GFS has trended slightly drier in the week-two period, but confidence is low.

Both models are again dry for Russian wheat areas over the next 10 days, which is a pattern that will need monitoring. Cool temps are seen slightly further East than what was being forecast to end last week, which would be good for the Russian wheat crop.

The forecast for South America is also mostly unchanged, with the only difference from last week being on the temp side; freezing temps are now seen stretching further North into South/Central Brazil in the next 10 days. Rio Grande do Sul and the SE continues to see rain for another week.

Have a great day!

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