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Grain Comments: 05-29-2024

Good morning.

Markets are lower at mid-week but well off their overnight lows. Volume has been light to start Wednesday, with traders attempting to gauge what kind of yield drag might be seen on crops that are still being planted or just recently got planted. The trade is also trying to figure out how much replant still needs to occur with just three trading days left in the month of May. Progress has undoubtedly sped up in the last two weeks, but a significant number of unknowns remain. Otherwise, wheat futures will trade the Russian crop size until more is known about weather there, which keeps that market volatile. Corn futures are trading 1-2 cents lower, soybean futures are trading 4-5 cents lower, and the Chicago wheat market is trading 3-4 cents lower. Products are mixed, soybean meal is down around $1/ton, and soybean oil is up 5-10 points. Outside markets are mixed also, crude oil futures are up 60-70 cents/bbl, the Dow Jones index is down 230 points, and the US$ index is up 15 points.

Tuesday afternoon’s weekly crop progress update showed that as of Sunday, corn planting in the US was 83% done (+13% on the week), and soybean planting was 68% done (+16% on the week). Spring wheat was seen 88% planted.

For corn and soybeans, these numbers compare to 89% and 78% complete as of this same week last year. Corn emergence was up 18% on the week to 58%, while soybean emergence was up 13% to 39%.

Winter wheat conditions in the good/excellent category were down 1% to 48%. The number was below trade expectations, but still well above the 34% rating that was seen on this week last year.

Key for wheat futures Wednesday will be whether the July Chicago contract rejects yesterday’s close at the psychological $7 level. This is the first close the market has had above this level since last August but was well off the highs of the day.

In a weekly report, Brazil export agency Anec sees soybean exports in May at 13.74 mmt’s, down from last week’s estimate of 13.83 mmt’s. Meal exports are seen at 2.08 mmt’s vs 2.29 previous, and corn exports are seen at 520,064 mt’s, vs 626,302 previous.

According to the head of Argentina’s grain export chamber, corn exports to China are on track to begin shipping in July. This comes as the government had said previously there were pending administrative procedures to obtain import licenses.

The Argentine government also announced yesterday that China had authorized two varieties of herbicide tolerant GMO corn for import, which helps Chinese importers obtain the needed licenses.

A chicken farm in IA is experiencing the worst bird flu outbreak in the US since 2022 according to the USDA. In a statement released Tuesday, the agency said some 4.2 mil birds had been infected on a farm in Sioux County. This comes as the virus has recently been in the headlines for infecting US dairy cattle.

Elanco Animal Health Inc. announced yesterday that they have received US FDA approval for a feed supplement that reduces methane emissions in dairy cattle by an average of 30%. The approval is the first of its kind by the FDA and comes as the administration continues to push for ‘green’ farming practices.

US equity futures have started Wednesday lower as American Airlines cut its profit forecasts yesterday afternoon, and extended losses in pre-market trade this morning. Airlines have also been a laggard to the EU stock market.

24-hour rainfall maps show scattered showers hitting the Eastern Midwest on Tuesday, with totals of 0.1″ to 1.5″ noted across local areas of Northern IN, NW OH, and Southern MI. Western KS and the Panhandles also received scattered moisture.

Not a lot of overnight changes in the short-term forecast. Most of the Midwest will continue to see dry conditions this week before storms move through the area beginning this weekend.

Following the active weekend, models continue to see a drier pattern emerging in the week-two period, as both the GFS and the EU model see below normal chances of precipitation for almost the whole of the country between June 5th and 11th.

Temps will be cooler than average through the rest of this week and into the weekend; beyond there, models see a warmer bias into the second week of June.

Also, not a lot of updates on the international front; the Black Sea region sees a warmup in temps over the next week but rainfall remains mostly absent.

Australia has trended slightly wetter in the GFS model overnight, which now brings the two models into better agreement. Some questions on temps though, as the EU model has a cooler bias for most of the country, while the GFS model has a warmer bias over the next 10 days.

And South America continues to see a pattern shift happening that should shut off the torrential down pours that have been occurring in Southern Brazil and Uruguay. 10-day precipitation is seen only in the far North. Temps also return to a warmer bias for Argentina in the 10-day period, which is welcome.

Have great day!

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