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Morning Comments

July corn -2 ¾ at 7.295

July beans +2 ½ at 15.9225

The DOW is UP

USD is Down

Crude oil +.49 at65.39

 

Good morning,

 

Overnight grain markets traded lower with the selling inspired by an improved weather outlook. The US saw rainfall over much of the corn belt (with some notable holes) to be followed by more seasonal temps this week and the prospect for some late but still welcomed rains in Brazil early this week. Impressively, the soy complex caught a bid this morning to rally back to trade unchanged to slightly higher led by the old crop contracts. The USDA May crop report comes out on Wednesday. Trade estimates are posted below. The USDA flashed an old crop corn cancellation of 280 tmt of corn to China along with a new crop sale of 1.020 mmt to China.

In the product trade, there is not much to see early on but the meal market is acting like it wants to follow through on last week’s breakout trade to the topside. Soybean oil is trading weaker along with rapeseed and palm oil from the veg oil side. The US pipeline shutdown from the weekend cyberattack is supporting the energy markets but so far that has not extended to the veg oil trade. Meal is gaining on oil in the oil share spread. Board crush margins are 1-2 cents easier.

Malaysian palm oil closed -59 or -1.3% to 4,368 ringgit. Malaysian Palm Oil Board data for April shows production at 1.522 mmt, just below expectations at 1.55 mln mt, but up from March’s 1.423 mln mt. End of April palm oil stockpiles was 1.545 mmt, higher than expectations at 1.442 mmt, and the 1.443 mmt at the end of March. Exports at 1.338 mmt, above analysts’ forecasts at 1.300 mmt and over the March pace at 1.188 mmt. May 1-10 palm oil exports are seen as +29-37% from the prior month period.

 

Overnight, the ag markets were broadly ‘red’, eyeing weekend rains in the U.S.; by the AM break, July Corn would finish only 3 cents lower, while the Dec ended 10 cents lower. Solid 1-2 inch rains fell in a narrow belt across Eastern Iowa, into N IL, N IN, most of OH, and PA. There was also a smattering of

Rains across select portions of the Dakotas and Plains, though far from a drought-buster, particularly in ND? 6-10 & 8-14 day maps are also warm and wet, which should keep the U.S. farmer mostly happy (for now). Crop Progress tonight should reflect a strong planting pace; we would look for it to come in on

either side of 65% complete. Offsetting the decent U.S. outlook some was ‘hot and dry’ in Brazil, which played-out in-line with most forecasts. AgRural cut their Brazil full year corn crop estimates by almost 8 mmt to 95.5, which is the lowest we have seen to date? U.S. Dollar also continues to hover around a two month low. We have a USDA monthly report due Wednesday; it will offer the USDA’s first ‘official’ opinion on new crop 21/22 balance sheets, though we suspect most analysts will retain their own views post-release? Korea’s FLC bought a cargo of feed wheat overnight. There was another batch of 8 AM flash sales; China bought 1.02 million metric tons of new crop (after buying 1.36 mmt Friday), but did cancel 280,000 metric tons (11 mil bu) of old crop, too.

 

Darren, David, and Elizabeth

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