On The Money Grain Commentary 5-18-23

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Corn Outlook:

Corn has come under pressure from reports that the grain accord between Russia and Ukraine has been extended for two more months. If the agreement had not been renewed, it could have diverted some business to the U.S. This would have been welcomed as exports are lagging, and ending stocks at 2.2 BB, are the largest since 2016. Last week, inspections were impressive at 46.2 MB. However, they are still below the average of 46.8 MB that must be shipped on a weekly basis to reach USDA’s target of 1.775 BB. In other matters, planting is progressing quickly at 65 percent done compared to 45 percent a year ago and 59 percent for the average. Looking ahead, it is going to be difficult to draw the bulls’ interest as stocks are growing, longer-term weather looks benign, and Brazil has displaced the U.S. as the world’s largest exporter of corn.

Bean Outlook:

Soybeans face a strong headwind from ending stocks at 335 MB, the highest since 2017, record production in Brazil of 155.0 million tons, and record global stocks of 122.5 million tons. In addition, exports are declining with inspections last week a marketing year low of 5.4 MB. China took only 301,000 bu. Shipments to them have fallen 94.5 percent since early November while overall shipments have declined 86.7 percent. In other matters, planting is progressing at a solid pace, and is 49 percent complete versus 27 percent a year ago and 36 percent for the average. The bottom line in soybeans is that adverse weather during the growing season will probably be needed to bring the bulls back to the table.

Wheat Outlook:

If the agreement between Russia and Ukraine had not been extended this week, we might have seen an increase in U.S. exports. This would have been welcomed as exports are forecast at 725 MB, which is a historic low. Meanwhile, exports from our competitors, Canada, Argentina, EU, and Russia are rising. Last week, inspections were nominal at 8.9 MB and below the average of 9.3 MB that must be shipped weekly to reach USDA’s projection. In other matters, the rating of the winter wheat crop stood unchanged at 29 percent in good-to-excellent condition and compares to last year’s rating of 27 percent. Meanwhile, spring wheat planting is progressing slowly at 40 percent complete versus 57 percent for the average.

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