TFM Midday Update 05-08-2023

CORN

Corn is trading lower with pressure from new crop pulling the front months down. Prices were higher earlier today due to weekend rains in the Corn Belt.
On Friday the USDA will release the WASDE report which is typically a market mover. Argentina’s corn crop is expected to be lowered, and US exports are expected to be reduced.
Warming temperatures this week should allow for more favorable planting conditions across much of the Midwest.
Support could come from a potential end of the Black Sea grain deal which expires on the 18th, which Russia claims it will not renew unless its lofty terms are met.

Soybeans along with soybean meal and oil started the day on a strong note, but all three products have faded and are now trading lower. Crude oil remains positive so far.
Palm oil futures surged 4.3% on Monday and are now at the highest price in three weeks. Lower world veg oil prices had previously been dragging soy products lower.
In Argentina, the Buenos Aries Grain Exchange has hinted at a further cut their estimates of soy production which is already a record low 22.5 mmt due to the extreme drought. Final production could be under 20 mmt.
Funds were sellers of soybeans for the week ending May 2, but maintain a net long position. Prices have rebounded since then and it is possible that funds have been buying back some of those contracts.

Along with corn and beans, wheat began the day higher but has faded. Chicago wheat is lower while KC and Minn wheat are trading higher due to poor crop conditions in OK.
The Wheat Quality Council Tour begins on May 15, which will give a better idea to the damage of the Kansas crop, but the Oklahoma crop is already reportedly the smallest since 1955.
If the Black Sea grain deal is not renewed on the 18th, exports for other wheat producers globally will open up and should be bullish for prices.
Friday’s CFTC report showed non-commercials adding to their net short position which now sits at 126,324 contracts, but the recent reversal higher may have caused some short covering.

Amanda Brill