TFM Midday Update 5-22-2024

CORN

  • Crude oil is lower this morning, which may limit upside for grain futures, especially corn and soybeans due to their biofuel relationship.
  • Central Brazil, where conditions have on the drier side, is expected to receive some rain over the weekend. This should benefit this region, but rains and flooding continue to impact southern Brazil as well.
  • Storms impacted much of the central US over the past 24 hours, bringing heavy rains and in some cases, flash flooding and tornadoes. According to the seven-day forecast, there will potentially be more rains to come.

SOYBEANS

  • There continues to be talk that China has purchased US soybeans for July / August shipment, with reports ranging from two cargoes to possibly between six and eight cargoes. However, there were no flash sales announced by the USDA this morning, meaning that if the rumors are true, the sales have been under the daily reportable level of 100,000 mt.
  • Palm oil futures are closed for holiday, so there is no influence from that market today. But in general, palm oil prices are well below a year ago due to talk of increased production and lower export demand.
  • Brazil soybean premiums are on the rise, making US exports much more competitive. Back in January, Brazil soybean FOB values saw a roughly $2 discount to the US; that gap has now narrowed to just a few cents.

WHEAT

  • Paris milling wheat futures gapped higher this morning, which provided early support to the wheat market, but those earlier gains are fading. US futures have seen a two-sided trade today so far.
  • Rain did fall in some drier HRW areas including Colorado and western Kansas. But this was a double edged sword, as the storms also came with heavy winds and hail in some areas.
  • The Black Sea region’s forecast looks mostly dry for the next two weeks; the latter part of the forecast also turns hotter. This has some crop analysts predicting Russia’s wheat production will decline below 80 mmt.

Author

Brandon Doherty

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