TFM Midday Update 04-27-2023

CORN

Corn is trading sharply lower again today with the July contract breaking below 6 dollars to fill the gap made in July 2022. Another sale cancellation to China of 12.9 mb of corn is pressuring the market.
Corn export sales of 15.7 mb for 22/23 were up 28% from the previous week but down 49% from the prior 4-week average. Last week’s export shipments of 42.4 mb were below the 48.1 mb needed each week.
Ethanol production slowed last week with production falling by 5.6% to just 967,000 barrels per day.
Brazil’s safrinha corn has benefited from very good weather and a record crop is expected. Because of this, Brazilian corn will most likely be cheaper than US offers this summer.

Soybeans are lower for the 7th consecutive day while July soybean meal is lower for the 8th day. Soybean oil is down as well for the 6th day, as palm oil continues its decline and is off 3.22% for its lowest close since October.
Soybean export sales of 11.4 mb for 22/23 were up from the previous week and up 38% from the prior 4-week average. Shipments of 16.7 mb were above the 13.2 mb needed each week to achieve the USDA’s export estimates.
With Brazil’s harvest nearly complete, FOB basis has stabilized, and Paranagua basis has reportedly risen by 40 cents this week, which should be supportive to US prices.
Cargill’s head trader in Brazil has reported that Chinese demand for Brazilian soybeans has been lighter than anticipated which has created a storage issue and has caused more producers to sell cash beans.

Wheat is lower for the 7th consecutive day as US weather improves, funds continue to add to their short position, and grains keep leaving from Black Sea ports.
Export sales of 5.7 mb for 22/23 of wheat were down 40% from the previous week and down 7% from the prior 4-week average. For the 23/24 marketing year, there was an increase of 7.4 mb.
Last week’s wheat export shipments were 11.2 mb and were below the 20.8 mb needed each week to achieve the USDA’s export estimate of 775 mb for 22/23.
There is doubt that the Black Sea Grain Initiative will be renewed by May 18, and Russia is insisting on changes to payments, logistics, and insurance on its own exports before agreeing to extend.

Amanda Brill