Ag Market View for Apr 12.23


The soybean complex closed mixed with spot soybeans are up $.07, while new crop contracts were $.06 – $.07 lower.  Meal was up $1-$3 while soybean oil was down 80-90.  May-23 soybeans closed back above its 50 and 100 day MA’s and at one point trading above yesterday’s high.  The May/July spread jumped $.06 today to a $.32 inverse as so far Argentine farmers haven’t sold off much inventory despite the currency incentive.  Spot board crush margins slipped $.12 today to $1.02.  Abiove held their Brazilian production forecast at 153.6 mmt, in line with the revised USDA forecast of 154 mmt.  They raised their Brazilian export forecast 1.4 mmt to 93.7 mmt, 1 mmt above the USDA estimate.  As of April 9th EU soybean imports have reached 9.5 mmt, down 13% from YA.  Yesterday’s 5.5 mmt reduction in global production from the USDA was matched by a 5.3 mmt reduction in global usage.  Endings stocks among the Top 4 soybean exporters slipped 2 mmt to 57 mmt.  Stocks/use for the Top 4 exporters slipped to just under 18%, the lowest in 10 years.  If we follow the same pattern as the last major drought in Argentina, 2017/18, production changes here forward will likely be minimal.  Export sales tomorrow expected at 10 – 25 mil. for soybeans, 100 – 300k tons soybean meal, and 5 – 20 k tons soybean oil. 


Spot May-23 was up $.05 while new crop contracts are down $.02 – $.03 at midday.  Strong basis continues to support old crop.  While Midwest temperatures are expected to cool off starting this weekend, not much moisture is associated with the cool front.  This should set the stage for a good start to corn plantings by May 1st.  Also pressuring new crop contracts are forecasts for good rains across Mato Grosso and MGDS keeping Brazil’s 2nd corn crop prospects high.  Weekly ethanol production slipped to 959 tbd last week, well below expectations and the pace needed to reach the current USDA usage forecast.  Production was the lowest since the first week of the calendar year as maintenance shutdowns were cited.  While gasoline demand slipped from last week’s 3 month high, it was still up 2.3% from YA.  As we expected the USDA kept their corn usage forecast at 5.250 bil. bu. in yesterday’s WASDE report, this forecast is becoming harder to justify baring a surge in weekly production levels.  Production among the Top 4 global corn exporters slipped 3 mmt (Argentina) in yesterday’s WASDE report, while exports slipped only 1 mmt (Argentina down 3 mmt, Ukraine up 2).  Stocks/use for top exporters remains slightly above 8%, barely above the historic lows from the past 2 years.  Exports tomorrow expected between 30 – 60 mil. bu. 

Grain storage bins


Wheat prices closed mixed, unable to hold early session strength despite ongoing drought in the US Southern plains and concerns over the Black Sea Grain Initiative.  Russia continues to express doubt over the longevity of the grain deal beyond mid-May as they seek the lifting of economic sanctions, access to SWIFT banking system, insurance of freight and less restrictions on fertilizer sales.  The UN confirmed the BSGI resumed today after a 1 day halt in vessel inspections yesterday.  Chicago was up $.02 – $.05, while both KC and MGEX were down $.02 – $.04.  KC/Chicago spread corrected $.17 off yesterdays all time high at $2.01 over.  Some of the extended weather models do offer prospects for rains in the US southern plains toward the end of the 2 week outlook, however confidence is low.  EU soft wheat exports have reached 23.8 mmt as of April 9th, up 8% from YA.  Japan bought no wheat in their feed wheat tender.  Nonghyup Feed reported bought 60k mt of optional origin feed wheat at $306/mt CF for Sept delivery.  South Korea bought 45k mt of US milling wheat, details so far unavailable.  Global stocks slipped to 265 mmt in yesterday’s WASDE report, the lowest in 6 years, while stocks/use fell to 33% the lowest in 8 years.  Among leading exporters stocks/use are just under 15%, the lowest in over a decade.  Export sales tomorrow expected between 6 – 16 mil. bu.

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