Grain Comments: 05.22.24

Good morning. Ag markets are higher to start Wednesday as wheat futures continue to rise. Front month Chicago futures again traded to new highs overnight, with a close above the psychological $7 level needed to continue the trek higher. Estimates of the Russian wheat crop continue to drop by both private forecasters and the Russian government, while sources say export prices out of the country have risen to near $240/ton, after bottoming out below $200 just a few months ago. Corn futures are trading 2-3 cents higher, soybean futures are trading 3-5 cents higher, and the Chicago wheat market is up 6-9 cents. Products are mostly higher, soybean meal is trading unchanged to 50 cents/ton higher, and soybean oil is up 40-50 points. Outside markets are mostly lower, crude oil futures are down 50-60 cents/bbl, the Dow Jones index is down 100 points, and the US$ index is up 20 points.

Today’s Reports: EIA Weekly Ethanol Production/Energy Stocks; May FOMC Minutes

• This morning’s weekly ethanol production report is expected to show daily production for the week ending May 17th in a range of 990k-1.028 mil bbls, while stocks are seen in a range of 23.85-25.0 mil bbls. Both numbers would be in line with last week’s data.

• According to the European Commission, EU soft-wheat exports through the beginning of May were seen at 26.3 mmt’s, down from 28.6 mm’ts in the same period last year. The Commission notes that data is only through May 3rd due to a technical glitch.

• China’s Finance Ministry announced on Tuesday it would be implementing nationwide full-cost insurance and planting income insurance policies for rice, wheat and corn.

• According to a joint statement from the Ag Ministry and the State Administration of Financial Supervision, the policy is aimed at stabilizing farmer income, while also encouraging the planting of staple grains. This also comes amid Beijing’s push for greater food security.

• A farm in the Victoria state of Australia is investigating an incident of avian influenza at a poultry farm according to Australia’s ag department. Preliminary findings indicate the virus strain is different than the one that has been recently found in the US, but lab testing is still being completed.

• Israel has recalled its ambassadors from Ireland and Norway after the two countries said they would recognize a Palestinian state, while also threatening to recall its envoy to Spain for the same reason.

• Ahead of today’s FOMC minutes, Fed officials continue to take a ‘higher for longer’ stance, as both the Cleveland Fed chief and the Boston Fed chief have made comments suggesting summer rate cuts were still a way’s off in recent days.

• A powerful tornado tore through Greenfield, IA yesterday/last night, with multiple deaths and injuries reported. Along with this, the state generally saw 1-3″ of precip for all but the Southeast corner. MN and WI also saw similar rainfall totals.

• While heavy rains and strong storms were seen in the West, the East experienced another mostly dry day, which should’ve allowed for good planting progress to be made. As mentioned yesterday, Ohio is one of the furthest states behind on corn planting.

• Wednesday’s forecast sees the exit of yesterday’s system through the Great Lakes into Canada, while a smaller system moves across the South/Southeast. The EU model sees totals of 0.5 to 2.5″ for areas of E TX/OK/LA/AR. Otherwise, the majority of the Corn Belt will be mostly dry Wednesday.

• Both models see one more low pressure system sweeping across the Northern Corn Belt Friday into this weekend, taking a similar path to the systems that produced strong storms in the West early this week.

• Beyond here, models continue to see a pattern shift into the first week of June, where the Eastern US has a chance to go dryer, while the South/Southwest sees a little bit better moisture. Both would be welcome developments.

• Temps are still seen mostly above average for the East into this weekend, but here too models see a shift to warmer West/cooler East into the end of May, which has not been the case most of Spring.