TFM Morning Update 05-06-2024

CORN

Corn is trading slightly lower this morning with the July contract back down at the 100-day moving average. This follows a 10-1/4 cent gain in the contract last week that was caused by production issues in South America and potential planting delays in the US.
This Friday, the USDA will release its May Supply and Demand report, and traders expect that old crop ending stocks will be steady to lower, that there could be an increase in export demand, and the 24/25 new crop balance sheet will be released as well. Using a yield of 181 bpa, production should be estimated around 14.8 billion bushels.
Friday’s CFTC report showed that as of April 30, funds bought back 20,506 contracts of corn which leaves them net short 218,040 contracts.

Soybeans are trading a couple cents lower to start the week, and the July contract is trading 7-cents off its overnight highs which saw prices move higher again and just below the 100-day moving average. Futures have been supported by harvesting issues in South America.
Both Argentina and southern Brazil remain far too wet which is causing soybeans to be left in the field unable to be reached. In Rio Grande do Sul in Brazil, the soybean crop that is left is reportedly deteriorating quickly as the area has faced significant flooding. This could cause production in the state to fall to 19 mmt.
Friday’s CFTC report surprisingly showed funds as sellers of 222 contracts of soybeans as of April 30 which increased their net short position to 149,236 contracts. It should be noted that the more significant rally came the following day with the July contract gaining 37-3/4 cents on the week.

All three wheat classes are trading lower this morning with KC wheat leading the way as some areas of western Kansas that had been forecast to be very dry are in better condition than had been expected. This morning losses in wheat are likely dragging corn down.
Global weather remains an issue for wheat with Russia dealing with limited rains and potentially colder than expected weather. The western Canadian Prairies are dry but are forecast to receive rain this week, and western Europe remains too wet.
Friday’s CFTC report showed funds as net buyers of Chicago wheat by 28,318 contracts which leaves them net short 47,866 contracts. Funds were buyers of KC wheat by 18,598 contracts which left them net short 29,610 contracts as of April 30.

Amanda Brill