Written Commentary
Ag Market View for May 1.24
May 1, 2024
CORN
Prices finished steady to $.01 higher as May-24 bumped up against resistance at the 50 day MA of $4.37 ¼. In the US heavy rains are expected this week across the Gulf coast and Delta region, with some isolated flooding possible. Delayed plantings with the potential for some replanting is likely. Export inspections at 56 mil. bu. were above expectations and well above the weekly amount needed to reach the USDA export forecast. YTD inspections at 1.076 bil. are up 35% from YA, vs. the USDA forecast of up 26%. Late on Friday it was reported the Biden Administration would be more restrictive than ethanol producers expect and that corn based ethanol wouldn’t automatically qualify for SAF tax subsidies. Only corn produced from utilizing sustainable growing techniques would qualify. How exactly this will be monitored is not known, with a final EPA announcement put off until May. Friday’s CFTC – COT report showed Money managers were net seller of 7,826 contracts of corn extending their short position to 259,556 contracts. My US corn endings stocks est. for Thursday’s USDA WASDE report is 2.097 bil. bu., down 75 mil. from the Mch-24 forecast. The lower stocks are result of 50 mil. higher in feed and ethanol use, while down 25 mil. in exports.
SOYBEANS
Prices were mixed with beans steady to $.03 lower as spreads also weakened, oil was 80 – 100 lower, while meal was up $3. May-24 beans continue to consolidate near its 50 day MA, currently $11.85 ½. May-24 oil is back below its 100 day MA however remains stuck in a $.47- $.50 trading range. May-24 meal stopped shy of resistance at its 50 day MA, currently $339. The next resistance is at the March high of $347.60. Spot board crush margins slipped $.01 today to $.84 ½ bu. with soybean oil PV falling to 41.6%. South American weather remains favorable for crop development. Good rains are expected across NC and NE growing regions of Brazil keeping 2nd crop corn prospects elevated. Dry areas in SW and SC states of Mato Grosso Do Sul and Parana are also trending wetter into mid-month. Argentina is expecting a good mix of rain and sunshine over the next week to 10 days with heaviest rains to favor southern growing regions. Export inspections at 18 mil. bu. were in line with expectations and above the weekly amount needed to reach the USDA export forecast. YTD inspections at 1.382 bil. are down 19% from YA, vs. the USDA forecast of down 14%. MM’s last week were net sellers of 3,476 contracts of soybeans, just over 13k contracts of meal, while being net buyers of 7,432 contracts of bean oilThe higher stocks are result of 15 mil. higher crush and down 25 mil. in exports. AgRural reports the Brazilian crop is now 78% harvested as of late last week, down from 82% YA.
WHEAT
Prices finished mixed with Chicago steady to $.02 lower, MGEX was steady to $.02 higher, while KC was up $.03 – $.06. May-24 Chicago failed to trade above Friday’s high and to hold above its 50 day MA at $5.69. Both May-24 KC and MGEX made new highs for the month. Little rain is expected across the WCB with only trace amounts across the Northern plains. Above to much above normal temperatures are expected across much of the nation’s midsection into mid-month. Friday’s CFTC report showed MM’s were lite buyers of both Chicago and KC while selling just over 3,500 contracts of MGEX. The MM short position in MGEX has swelled to just over 28,500 contracts, within a few thousand of the record large short position. SovEcon reports Russia exported 1.03 mmt of grain last week which included 820k mt of wheat, down from the 840k mt of wheat exported the previous week. IKAR reports the export price for Russian wheat ended last week at $210/mt, up from $208/mt the previous week.
Chart source: QST
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