TFM Daily Market Summary 04-26-2023

CORN HIGHLIGHTS: 

  • A cool but drier forecast should allow for planting to remain mostly on schedule. Though not an ideal end of April/early May for many, the fact is that based on a five-year average, planting this past week is ahead of schedule, especially in key corn producing states.
  • Weekly corn used for ethanol production last week at 97 million bushels was lower than expected and below the pace needed to meet USDA projection of 5.250 billion bushels.
  • Spillover weakness from yesterday’s export cancellation of over 12 million bushels likely added to today’s sluggish price tone.
  • S. corn prices (at the Gulf) are still over-priced compared to Brazil and Argentina. Expect exports to remain slow. A potential downgrade from USDA is a likely reality.
  • Wheat’s sixth day in a row lower, and double digit loss, also weighed on corn prices.

SOYBEAN HIGHLIGHTS:

  • Soybeans traded either side of unchanged today before ultimately selling off to make a 6th consecutive lower close.
  • Soybean meal moved to its lowest levels since December, while soybean oil closed higher despite a drop in crude oil of over 2.50 a barrel.
  • Crop consultant Dr. Michael Cordonnier said today that he expects soybean planting in the US to reach 0 million acres, 500,000 acres above the USDA’s estimate, with a trendline yield of 52 bpa.
  • With Brazil’s soybean harvest nearly concluded at over 95% complete, their soybean premiums have stopped falling this week, which could be supportive of US prices.
  • Early soybean planting should pick up a bit in the middle of the Corn Belt this week as more favorable weather is forecast in the 7-day outlook.

WHEAT HIGHLIGHTS:

  • An improved weather forecast and rain falling in the Southern Plains pressured the wheat markets lower.
  • Stats Canada’s seeding intentions showed all wheat acres up by 1 million (to 27 ma) and that is 6.2% above last year.
  • Offering little support, a group of millers estimated US soft wheat production up 20% at 400 mb this year, up from last year’s roughly 337 mb.
  • Reportedly, Russia has asked vessel owners and captains in the Black Sea to sign a letter, with the understanding that the export corridor deal will be ended on May 18th.
  • Russia is also asking to be let back into the SWIFT program and for sanctions against their banks to be dropped before any consideration of renewing the export corridor.
  • Funds are suspected of adding to their already sizable short positions in wheat, which may be confirmed in the next Commitments of Traders report, and could be supportive if the market receives friendly news.

DAIRY HIGHLIGHTS: 

  • The big story in dairy continues to be the spot cheese trade. Sellers moved another 24 loads of inventory as the price fell 0.25c to $1.56625/lb today.
  • Spot cheese weakness is weighing on milk futures, but the market may be getting a bit oversold. Milk futures were just slightly lower on Wednesday, although second month milk actually was bid a penny higher to $16.61.
  • Spot butter and powder were both unchanged with no loads traded in the session. The Class IV complex as a whole is quiet.
  • May 2023 Class III milk made new lows for the move today before closing green on the session.
  • Additional pressure comes from a declining feed market. Soybean meal is down another $16.20/ton this week already.

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Author

Brandon Doherty

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