On The Money Grain Commentary 5-11-23

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Corn Outlook:

Concerns that Russia may not sign the agreement with Ukraine, allowing uninterrupted exports from the Black Sea Region, has kept a cloud hanging over the grains. Meanwhile, China continues to cancel corn purchases, while planting is progressing at a rapid pace and is 49 percent done compared to the average of 42 percent. This suggests that USDA’s projection for a 3.4 million acre increase is on target with the possibility for a record yield. If so, ending stocks this fall could be near 2.0 BB. In the meantime, exports are struggling even though the pace has improved since mid-February. Last week, inspections were 37.9 MB and must average 51.2 MB each week to reach USDA’s target of 1.850 BB. Unless they improve significantly, we will fall 100 MB short of their projection which means prices could face an uphill struggle.

Bean Outlook:

There is not much fresh news in soybeans other than planting is progressing at breakneck speed and is 35 percent complete compared to the average of 21 percent. Meanwhile, exports continue to lag as they face stiff competition from Brazil’s record crop. Last week, inspections were 14.5 MB and must average 15.0 MB each week to reach USDA’s projection of 2.015 BB. For the past 3 weeks, they have not met the average needed. Shipments to China last week were only 2.5 MB with the pace to them having declined 90.8 percent since early November. Meanwhile, our overall pace of shipments is down 82.9 percent during the same period. The bottom line in soybeans is that weather will likely have to become a factor at some point during the growing season to support higher values.

Wheat Outlook:

The possibility that Russia may not renew the grain accord with Ukraine on May 18th, and declining conditions of the winter wheat crop are widely discussed issues in the grains. Last week, the crop rating improved one-point to 29 percent in good-to-excellent condition which is on par with a year ago. However, the subpar conditions have done little to boost prices. Meanwhile, planting of the spring wheat crop is getting underway at 24 percent complete but lags the average of 38 percent. Looking at exports, they were disappointing last week at 7.6 MB and well below the average of 19.3 MB that must be shipped to reach USDA’s target of 775 MB. As it stands now, the pace is running about 45 MB short of their projection.

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