May corn +3 ¼ AT 5.575
May beans +4 ¼ AT 14.23
The DOW is Down
USD is UP
Crude oil .14 at 59.47
Overnight grain markets traded modestly higher in another quiet, limited range trade. The nearby soybean bull spread is soft today ahead of the Goldman Roll that starts tomorrow where the index funds will be rolling longs from May to July and often creates some front running of the spread, old crop to new crop spread is gaining. Domestic bean basis remains firm at historically elevated levels.
The US GFS weather forecast features cooler temps on the way, and it stays wet across the South while the Midwest will turn drier after the current rains move out later this week. This pattern could slow bean planting progress in the delta in a year where that early supply availability is much more important than normal. USDA will begin updating bean planting progress one week from this coming Monday.
In the product trade, meal is higher and oil steady with the oil share spread looking to relax after three days of gains. Gains in competing veg oils like canola (trading +1.5%) and palm oil (closed +1.1%) may make it difficult to hold down soybean oil today.
USDA crop report comes out on Friday – range and avg. of trade estimates shown below. This report focuses on the old crop balance sheet where demand projections can be adjusted. Corn stocks are expected to be lowered by an avg. guess of 106 mb with larger exports anticipated. Wheat stocks are expected to rise nominally by 9 mb on the avg. guess. Beans are less clear if the USDA will print anything lower than their current 120 mb carryout at this timing. If the USDA decides to increase their soybean exports from the current 2.250 billion bushels, they can offset that demand with an increase in their import number that sits at 35 million bushels as of now. The record for US soybean imports was in 13/14 when we imported 71.7 million bushels, Linn is currently estimating imports of 60 million bushels. The new crop balance sheet reveal comes in the May crop report.
Darren, David, and Elizabeth