Written Commentary
Ag Market View for May 26.23
May 26, 2023
SOYBEANS
U.S. stocks turned higher as investors weighed the possibility of a slower pace of interest rate increases and uneven corporate results. Large spike down in treasuries may have scared the market may have scared the market early and may now be more comfortable with higher rates. This week, China bought US beans. China and US margins ae historically high. Favorable Brazil 2023 crop start could limit upside in soybean futures.
CORN
Corn futures also bounced off session lows. There is no new news except slow farmer selling and turnaround in US Dollar and higher Crude. Lower demand for US exports and talk of record Brazil crop may be offset by dry Argentina weather and fact US feeders and ethanol plants need corn. There were reports that Russia UN ambassador said Ukraine export corridor deal may not be extended. Early in the week, there was talk that UN and Turkey offered optimism that the deal may be extended. There will be rains across E KS, OK and MO. Overall Midwest drought continues. US Mississippi river levels ae record low. Dry weather should advance US corn harvest.
WHEAT
Wheat also traded higher off session lows. Increase World buyers needs and talk Russia may not extend the Ukraine corridor export deal offers support. E KS, OK and MO could see good rains. Rest of US south plains could remain dry. Talk that Russia may impose and grain export quota could also rally wheat futures. WZ was near a high of 12.82 in May on supplies worries. WZ dropped to 8.61 in August due to demand worries. New supply worries rallied WZ to near 9.45 in Sep. WZ recent lows near 8.32 due to lower US exports and higher Russia supply. KWZ had a similar journey from 13.76 to 8.80 to 10.37 to 9.29. MWZ went from 14.00 to 8.61 to 10.24 to 9.38. MWZ is over KWZ due to need for high protein. What futures up to 2023 supply vs demand and eventual outcome for Black Sea wheat exports.
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