TFM Midday Update 5-1-2023

CORN

The Fed is expected to again raise interest rates at this week’s FOMC meeting. But the second largest bank failure in US history (First Republic Bank) could cause them to think twice.
Funds are now estimated to be net short 40,000 corn contracts. They are said to have sold 146,000 contracts in total last week in the grain room.
This week should be mostly cool and dry across the Midwest, but widespread rains are forecast to return this weekend.
The USDA may need to lower their US corn export estimate. Commitments are currently still down 33% from last year.
The E15 waiver may be passed to allow for sales of ethanol blended gasoline during the summer months.

China’s PMI data was lower in April than in March – this could indicate a shrinking economy.
Funds are said to have substantially reduced their long positions in soybeans and soybean meal.
The third iteration of the soy / peso exchange rate program in Argentina is said to have resulted in 2 mmt of soybean sold.
So far there have been zero deliveries (for the May contract) of soybeans or soybean meal. However, there have been some soybean oil deliveries.

On this afternoon’s Crop Progress report, winter wheat is expected to show better ratings after the rains last week in the southern Plains.
The EU made a deal with countries in eastern Europe that will allow Ukraine’s exports to continue to pass west through that region, but imports would be banned in 5 countries.
North Dakota could see high temperatures by the middle of the week, which may improve planting conditions for spring wheat.
The deadline for an extension of the Black Sea grain deal is May 18. At this time, it seems unlikely that Russia will renew.

Brandon Doherty