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Grain Comments: 05-31-2024

Good morning.

Higher overnight markets to wrap up the week at the CBOT. Profit taking/short covering going into the weekend will likely be the theme in the markets on Friday, while volume has been rather light to this point in the morning. Traders will be curious to see whether forecasts still offer the Western/Central US ridging for the second week of June coming out of the weekend. Corn futures are trading 3-4 cents higher, soybean futures are trading 10-12 cents higher, and the Chicago wheat market is up 6-7 cents. Products are higher, soybean meal is up $5-6/ton, and soybean oil is up 20-30 points. Outside markets are mixed/quiet, crude oil futures are up 5-10 cents/bbl, the Dow Jones index is down 10 points, and the US$ index is down 5 points.

Traders see this morning’s weekly export sales report for the week ended May 23rd as showing corn sales in a range of 600k to 1.0 mil mt’s, soybean sales in a range of 200k to 400k mt’s, and wheat sales in a range of (100k) to 100k mt’s.

The corn sales would be slightly below the previous week’s totals, while the soybean and wheat sales would be in line with recent weeks.

In their weekly crop update, the Buenos Aires Grain Exchange estimated soybean harvest in Argentina at 86% complete, and estimated corn harvest at 30.1% complete. The group did not make any production updates; they estimate the soybean crop at 50.5 mmt’s and estimate the corn crop at 46.5 mmt’s.

According to StatsCanada, Canola processing was up 8% in April; Oil production was up 11.1% at 413k tons, and meal output was up 6.2% at 556k tons.

Monday’s USDA Fats and Oils report is expected to show soybean crush in April at 175.3 mil bu, down 6.2% from the same month last year. Oil stocks are seen down 12.4% at 2.225 bil lbs.

The simultaneously released Grain Crushings report is expected to show corn used for ethanol in April at 433 mil bu, up 4.6% from April of 2023. These reports will be out at 2pm central time on Monday.

The EU Commission made no adjustment to its soft wheat harvest estimate from last month, seeing the crop at 120.2 mmt’s. Barley production was increased slightly to 53.9 mmt’s, while corn production was lowered slightly to 68.6 mmt’s.

Barge shipments down the Mississippi River in the week ended May 25th were down 22.8% from last week at 548k tons. Corn shipments of 342k tons were down 29.3% from last week, while soybean shipments at 177k tons were down 15.3%.

Former US President Donald Trump was found guilty in a New York court of 34 counts of falsifying business records late Thursday afternoon. What happens next is in the hands of the judge, who will decide whether Trump gets prison time or some form of probation.

Economists see this morning’s PCE report showing a monthly increase of 0.3% in the core measure, while the annual rate is seen unchanged at 2.8%. These numbers, if realized, likely won’t do much to alter the Fed’s current view on rate adjustments.

Not a lot of new updates on weather for the US; a slow-moving low-pressure system will bring rainfall to the Western Corn Belt starting today, with the rains moving to the East through Saturday. The EU model sees the heaviest totals generally in the South, with 1-3″ advertised for LA/AR.

Past the weekend, models see one more system bringing rain through the Midwest Tuesday/Wednesday next week. After this, ridging is seen building into the West/Central US, providing a period of potentially dryer weather for the Northern Corn Belt.

Temps will begin warming starting tomorrow and look to stay above average for most of the US through next week. The West then really heats up starting late next week, with temps some 20-30 degrees above average in parts of Northern CA/NV.

The EU model continues to be the wetter of the two for Russian wheat areas. The GFS is trying to add scattered showers South of the Black Sea but hasn’t brought the moisture to the East. Temps here continue to be seen well above average for the next two weeks.

Heat moves into Southern Brazil/Argentina over the next week, with temps here seen 5-10 degrees Celsius above average. Models are wetter in far Southern Argentina in the 10-day period, while the rest of the area will be dry.

Have a great day.

 

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