TFM Morning Update 05-03-2023

CORN

Corn has turned lower this morning and has taken out the low from last Friday, in part due to hesitancy about today’s Fed announcement and also due to speculation about a large 2023 corn crop.
Today at 1pm central the Federal Reserve will announce their potential rate hike. They will likely announce a 25 basis point increase but there is a small possibility that rates are left unchanged due to the recent bank failure.
Brazilian corn prices have fallen to the equivalent of 5.18 for the July contract on the Bovespa exchange as their safrinha corn receives beneficial weather.
Ethanol production is projected to be lower than the previous week at 963k b/d, while the stockpile average estimate is 24.423 m bbl vs 42.306m a week ago.

Soybeans are trading lower this morning with both soybean oil and soybean meal trading lower as well, and crude oil continues its slide lower and is down over 2 dollars a barrel.
The Fed rate announcement is casting a bearish sentiment over commodities today but more bearish for soybeans is StoneX’s new estimate for the Brazilian crop which is now at 157.7 mmt for 22/23.
Earlier this week, NASS reported an increase in the soybean crush to 198 mb in March, but crush premiums have fallen significantly and may continue to drop.
In the North where fields are too wet, soybean plantings may increase as corn runs out of time, but temperatures are expected to rise over the next two weeks, drying things out.

The wheat complex is mixed today with Chicago and Minn slightly lower but KC a bit higher. Overall, wheat is faring the best today between corn and soybeans as the US faces very tight wheat supplies.
The Oklahoma wheat crop is now seen at 54.3 million bushels, the lowest crop since 1955 due to extreme drought and low yields.
Russian wheat exports in this season are now seen at 44.4 mmt versus previous estimates of 44.5 mmt according to Sov Econ. Russian traders have struggled to compete due to the unofficial price floor of $275/ton.
Spring wheat areas should benefit from warmer temperatures forecast over the next two weeks, but some fields may still be too wet and may keep plantings below the 10.57 million that the USDA has estimated.

Amanda Brill