TFM Midday Update 05-11-2023

CORN

Corn is trading lower after poor export sales and continued bearish pressure from China’s sales cancellations earlier this week. China has now canceled over 31 mb of US corn purchases since April.
Export sales were not good and showed net sales of 257,300 mt for 22/23, which was down from the previous week but up 11% from the prior 4-week average. Exports of 1,146,100 mt were down 33% from the previous week and 8% from the prior 4-week average.
The Brazilian crop is expected to be record large and likely between 123 and 125 mmt, but Brazil’s CONAB is now projecting 125.5 mmt.
Expectations for tomorrow’s WASDE are for a sharp jump in ending stocks for 23/24, with a carryout over 2 billion bushels. Old crop corn exports are expected to be lowered as well.

Soybeans began the day sharply lower with Nov making new lows, but the July and September contracts have rebounded and are now positive. Soybean meal is higher while soybean oil is lower. Crude oil has fallen over a dollar a barrel.
Export sales for soybeans were poor at 62,200 mt for 22/23, which was down 70% from the previous week and down 68% from the prior 4-week average. Exports were 411,000 mt and were down 27% from the previous week and 18% from the prior 4-week average.
The USDA confirmed a sale this morning of 132,000 tonnes of US soybeans for delivery to unknown destinations in 23/24.
Yesterday’s CPI data that showed slowing inflation was supportive as an easing of inflation will make the Fed less likely to increase interest rates. An easing of interest rate hikes typically moves the dollar lower, which makes US commodities cheaper relative to other countries.
The Rosario Exchange in Argentina is estimating their soy crop at just 21.5 mmt, down from 23 mmt at the previous estimate, and far below the USDA’s last estimate of 27 mmt. There have been some private analysts that are projecting production below 20 mmt.

Wheat is trading lower following very small export sales, falling Paris milling wheat futures, and cheap Russian wheat that continues to be sold on the market.
Export sales for wheat were 26,300 mt for 22/23, which was a marketing year low and was down 88% from the previous week and 86% from the prior 4-week average. Exports of 204,000 mt were down 29% from the previous week and 24% from the prior 4-week average.
Heavy rain is falling in the Plains including some of the driest areas of the southwest. These rains will be too late for much of the HRW wheat crop but may improve yields in certain areas.
Today is the second day of 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.

Amanda Brill