Morning Highlights 5.1.24
Highlights
Good Morning! A softer tone to start the day in the grain and macro markets.
Argentina’s oilseed sector workers ended their two-day strike late yesterday and operations in the shipping hub in Rosario resumed as well. Next week there will be a union meeting to discuss how to proceed.
The USDA crush report is expected to show an all-time number for soybeans at 205.6 million bushels per a Bloomberg survey. That would be up 11.7 million bushels from February and 7.6 million above last year. Corn for ethanol use us expected to come in at 464.5 million bushels, up 23 million from February and 28.4 million higher than last year.
The Feds are expected to keep interest rates steady in their announcement this afternoon. Post-meeting comments from Fed Chair Powell will be watched for any future monetary policy moves.
Ukraine exported 6.3 MMT of grain in April, up from 5.5 MMT in March. April shipments included 4.1 MMT of corn, 1.9 MMT of wheat, and 231k MT of barley. Through the first 10 months of the 2023/24 crop year, their shipments have totaled 22.9 MMT of corn and 15.8 MMT of wheat.
As of 7:45 PM CT: DOW down 41 points at 37,952, S&P down 13 points at 5,054, crude down $1.19 at $80.73, and the US $$ up 11 ticks at 106.230.
Corn
Futures had limited upside last night and for the most part we remain rangebound. Yesterday we were pressured by the weak soybean and wheat markets, so corn looks to remain a follower. The 7-day forecast continues to call for widespread rain coverage across corn acres, helping to decrease drought conditions and replenish moisture reserves. Ethanol production today is expected to sizeable rebound in production this week as plants come back online from seasonal maintenance, and stocks are expected to decline. Details released by the US Treasury Department on the updated GREET model for corn-based ethanol jet fuel eligibility for SAF tax credits. A pilot program through the USDA will look to be established to encourage the use of CSA, or Climate Smart Agricultural practices. Those will included no-till practices, cover crops, and enhanced efficiency for fertilizer on corn based ethanol. SAF tax credits range from $1.25-1.75/gallon.
- July ’24 will look for support near the 20 and 50-day moving averages, trades around 446’0 this morning. December ’24 is back below its 20-day MA this morning and traded below the 50-day MA overnight as well, trades around 468’6 this morning.
- Ck24/cn24 at 6’2 carry, cn24/cu24 at 9’0 carry, and cz24/ch25 at 13’6 carry.
Soybeans
Soybeans were beat up yesterday thanks to a softer meal market. The little glimmer of upside that meal had on Monday due to the strike in the Argy port was washed away. CIF beans yesterday were mostly steady yesterday with minor changes to barge freight as well. Many more processing plants rolled to July with bids improving during the roll. Brazil’s CONAB sees harvest progress at 90.5% with southern states still working to get through fields. But forecasts for those areas remain wet.
- July ‘24 is back below all major moving averages, we look poised to go and test the recent low of mid-April at 1145’6, and the contract low is 1140’4 from 2/29. November ’24 sees the April low at 1146’6 from the 19th.
- July meal had a very sizable range yesterday and is lower this morning at 346.9. July soybean oil is down 32 points at 43.32. Board crush is down over a nickel at 79 cents.
- Sn24/sq24 at 2’2 carry and sx24/sf25 at 12’0 carry.
Wheat
Futures are lower across Mpls and KC wheat, while Chicago wheat was able to head into the break up 1-2 cents. Forecasted rain stretches a little bit further into the dry HRW areas in Kansas and other dry parts of the plains. Russia is also expected to see some rains, although it’s a question how much. The Canadian Prairies are also expected to see strong precip over the next couple of weeks. Chicago wheat sees deliveries at 1,151 contracts with 1,000 new contracts in Maumee, OH, and there were no deliveries in KC or Mpls. The USDA FAS put production in Australia at 25.8 MMT and exports at 17.5 MMT.
- Sept Mpls at 707’6, July KC at 629’2, and July Chicago at 605’2.
- July/Sept spreads: Mpls at 8’4 carry, KC at 12’6 carry, and Chicago at 18’4 carry.