TFM Midday Update 05-10-2023

CORN

May and July corn are trading slightly higher with deferred contracts lower. CPI data was friendly today with inflation increasing 4.9%, less than the 5% estimate and the lowest annual pace since April 2021.
Forecasts are calling for a mixture of moisture and warmth throughout the next two weeks, which should hasten planting along and in good conditions.
Friday’s WASDE will most likely show a larger US crop and ending stocks number for 23/24. The average trade guess for the 23/24 carryout is 2094 mb.
The central Illinois corn basis is reported to be 70 over futures as end users deal with limited supply and unwillingness to sell, which explains the large premium May holds to later contracts.

Soybeans are trading slightly lower along with soybean oil, while soybean meal moves higher. The decline in crude oil today has not been supportive, as well as a decline in palm oil.
Chinese soybean imports for April were reportedly down 10% compared to a year ago at 266 mb. China’s May and June imports are expected to rise, however.
CONAB has reported that 96% of the Brazilian soy harvest is now complete, and they are estimating production at 153.6 mmt. Friday’s WASDE report has guesses for Brazilian production at 155 mmt, up from the previous estimate.
Trade guesses for Argentina’s soybean production in the WASDE report are at just 24 mmt, down 3 mmt from the previous estimate, but some estimates have that number even lower.

Wheat is mixed again today with Chicago down the most, slight losses for KC wheat, and slight gains for Minn wheat. Poor crop conditions in OK and KS have been supportive of KC wheat.
Traders are focused on the potential end of the Black Sea grain deal which expires on May 18. Inspections resumed yesterday for exports out of the Black Sea, but the countries have not come to an agreement yet.
Today begins high level meetings between Russia, Ukraine, Turkey, and the United Nations over the Black Sea grain deal, and a resolution may be announced this week.
Friday’s WASDE report is expected to show old crop ending wheat stocks at 603 mb, up 5 mb from April due to smaller exports. The USDA will provide a production estimate as well which is projected to be 602 mb for all wheat.

Amanda Brill