TFM Midday Update 5-3-2023

CORN

Sharply lower crude oil yesterday (and so far today) may be the result of renewed economic concerns, with the Fed expected to raise interest rates this afternoon. This pressure could spill over into commodities.
The second crop (safrinha) corn in Brazil is in good condition. Southern and western Brazil have chances of showers over the next week or so.
Once the safrinha corn crop is harvested (around the July time frame) it could flood the market due to record crop size and lack of storage availability in Brazil.
A return to warmer and drier conditions for much of the Midwest should result in a pickup in planting pace.

Due to a lack of storage, Brazilian soybeans continue to flood the market. This is offering weakness to US futures and cash (and may lower US exports).
Higher temperatures (60s and 70s) in the Dakotas over the next couple weeks should help get the soybean crop planted there.
The drop in crude oil is weighing on soybean oil, which is in turn pressuring soybeans.
Daily stochastics show that both old and new crop soybeans are oversold – this could indicate that they are probing for a bottom.

Egypt bought wheat from Romania and Russia. The Russian wheat was purchased at $260 per ton. Russia had previously encouraged a $275 price floor on exports. (US SRW wheat is currently the world’s cheapest but is at a freight cost disadvantage).
Russia is engaging in talks to extend the Black Sea export deal. However, many feel that they will not extend the agreement again without reduced sanctions.
The Oklahoma wheat tour projected their crop at 54.3 mb. This would be the lowest crop since 1955.
The GFS weather model is projecting rains of up to 5-7 inches in parts of Nebraska and Kansas next week. The European model is drier, however.

Brandon Doherty