Daily Commentary
5/17/24
Wheat futures have seen a roller coaster ride this week. Most of the upside trading was seen in the overnight sessions, with red numbers being posted during the day session. Currently, CHI is down 4, KC is down 4, and MN is down 6. Row crop markets are mixed with Corn down 2, and Beans up 4. June Canola futures are up 8 points. Paris wheat futures are up a Euro on a 10-minute delay.
The U.S. Dollar is higher, Wall Street is continuing its run to the upside after the DOW eclipsed 40,000, Crude is unchanged, and Gold is higher.
This week's grain inspections report had wheat inspections above trade expectations at 366,339 mmt. Corn inspections were slightly lower than what traders were estimating at 937,729 mt. Soybeans were better than expected at 406,052 mt.
The crop progress report that was out on Monday afternoon showed winter wheat G/E ratings unchanged from the prior week at 50%. Traders were expecting to see a 1% increase week over week. Spring wheat planting jumped 26% from last week to 61% complete overall. Corn planting progress was in line with expectations at 49% complete. Traders knew that rains moving through the Midwest had kept planters out of fields. We should see a nice push on that this week, however. Soybean plantings were up 10% from the prior week at 35% complete.
Brazil's CONAB released its latest report on Tuesday morning. Wheat production was down from the prior report at 9.028 mmt. Total corn production was higher than the last report at 111.635 mmt. Soybean production was also higher than last month's report at 147.684 mmt.
Yesterday's weekly export sales report showed wheat sales at 78,500 mt for 23/24, and 304,300 mt for 24/25. White wheat sales were decent for 24/25 at 94,100 mt. Yemen was the main buyer at 50,000 mt, with the Philippines coming in second at 33,000 mt. HRW sales were disappointing with 25,800 for 23/24 and -8,800 mt for 24/25. Mexico appears to have canceled some new crop bushels and re-booked them for 23/24 shipment. HRS sales continue to dominate the by class exports with 149,800 mt sold for 24/25. The Philippines were the featured buyer after picking up 89,000 mt. Weekly corn sales were reported at 742,200 mt for 23/24, and 128,200 mt for 24/25. Mexico was the overall main buyer with 244,400 mt sold for 23/24, and 128,200 mt for 24/25. There was a flash sale of corn this week to Mexico for 135,000 mt in 23/24, and 270,000 mt in 24/25. Weekly soybean sales missed the low end of trade estimates with 265,700 mt for 23/24, and 25,200 mt for 24/25. There was a flash sale for 180,000 mt of soybeans to Unknown this week, with the majority of the sale for 23/24 shipment. The recent tariffs on non-agricultural goods out of China set by the Biden administration is anticipated to lead to a decrease in grain sales to the Asian super power.
We did have Japan in this week for 29,810 mt of Aussie white, 67,806 mt of Canadian red spring, 13,080 mt of U.S. HRW, and 10,820 mt of U.S. white wheat for July shipment. Strategie Grains upped its EU wheat production estimate to 123.5 mmt for 24/25. French G/E ratings were unchanged from last week at 64% overall. Germany is reporting a 8.3% reduction in wheat planted acres versus last year at 2.6 million hectares. Ukraine is estimating that 5.1 million hectares will be planted to spring crops for this year's harvest. The Kansas wheat crop tour is estimating this year's yield at 46.5 bpa versus the 5-year average of 42.4 bpa. The scouts are estimating KS wheat production at 290.4 million bushels. This month's USDA report had the crop at 267.9 million bushels.
Local cash markets have held steady after losing ground from Monday to Tuesday this week. Exporters have been holding steady as liquidity in the country has slowed down from the high seen on Monday. The lack of demand has kept exporter bids tied closely to the futures board, and that is expected to continue until we see a fundamental change to the market. Higher world values is helping to keep a floor under the market in the near term. All eyes continue to be on what Russia will produce, and for any news about an export quota on 24/25 bushels from the Black Sea country.
Corn futures have struggled to go higher with the anticipation of great planting progress this week. The higher production estimates coming out of Brazil has also pressured the futures board this week.
Soybeans are seeing some technical and spillover support as we get ready to close out the week. Higher bean product markets are keeping bids from sliding lower this morning.
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AFTERNOON FROM 2:30 - 4:30 P.M.
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CURRENT PROTEIN SCALES
DNS: +.04/-.08 PER 1/4% BASIS 14%
HRW: +.05/-.10 PER 1/2% BASIS 11.5%