TFM Morning Update 05-08-2024

CORN

July corn is trading a bit lower this morning as it chops around in a tight 1 3/4 cent range and traders begin squaring positions ahead of Thursday’s May USDA WASDE report.
Friday the USDA will release its May WASDE report, which will also be the first look at this year’s 24/25 production. The average trade guess for 23/24 US old crop corn ending stocks is 2.094 billion bushels, 28 mb less than April’s estimate on higher ethanol production. Whereas US 24/25 new crop corn ending stocks are estimated to come in at 2.282 bb, using a 180.7 bpa yield.
A South American crop analyst is estimating Brazil’s corn crop to be 112 mmt, significantly lower than last month’s USDA estimate of 124 mmt. They have also lowered their estimate of Argentina’s corn crop by 2 mmt to 47 mmt versus the USDA’s April 55 mmt estimate. With the USDA’s estimates so high relative to others, the trade will be looking to see how much the USDA lowers their estimate of Brazil’s corn crop to narrow the gap.
Managed funds were net sellers of 1,000 corn contracts yesterday and are now estimated to be short 200,000 contracts.

Soybeans are lower across the board, with July soybeans trading about 4 cents off their lows in an 8 1/2 cent range. Meal and oil are following through on yesterday’s action with meal higher and oil lower.
The average trade guess for 23/24 US soybean ending stocks in Friday’s WASDE report stands at 341 million bushels, mostly unchanged from the 340 mb in the April report. US 24/25 new crop soybean carry out is estimated to come in around 439 mb, a nearly 100 mb increase from this year, using a 52 bpa yield.
Estimates of crop losses in S. Brazil may be easing from earlier fears with some now estimating those losses as little as 1 mmt tons versus upwards of 5 mmt previously. One South American crop analyst is estimating Brazil’s crop at 147 mmt versus the USDA’s 155 mmt from April. They are also estimating Argentina’s crop to be 51 mmt, just over the USDA’s April estimate of 50 mmt.
Yesterday Managed funds were active sellers in the soybean market selling an estimated 2,000, which brings their estimated short position to 117,000 contracts. It is also estimated that they sold 2,000 contracts of meal while buying 2,000 bean oil contracts, bringing their estimated positions to a net long 58,000 meal contracts and short 62,000 soybean oil.

KC wheat is leading the wheat complex lower again this morning as all three classes see follow through selling on yesterday’s weakness, and better chances for rainfall in southwestern Plains this weekend through next week.
In Friday’s WASDE report, the average trade guess for the US 23/24 wheat ending stocks is looking for just a 3 mb decrease from last month to 695 mb. Though the trade is anticipating much larger US production for 24/25 new crop, 1.895 billion bushels for all wheat, with 782 mb in ending stocks.
Managed funds were relatively small but active sellers yesterday in Chicago wheat. It’s estimated that they sold 2,000 contracts, bringing their estimated net short position to 30,000 contracts of Chicago wheat.

Scott Masters