This Week in Commodities 5-12-2023

Corn Falls on Bearish WASDE.

  • July CBOT corn futures shed 10-1/4 cents this week to close at 586-1/4.
  • December CBOT corn futures shed 26 cents this week to close at 508-3/4.
  • Ending stocks for US corn in both the 2022/23 and 2023/24 marketing years came in above pre-report estimates at 1.42 and 2.22 billion bushels respectively. Starting yield estimate for the 2023/24 US corn crop came in at 181.5 bushels per acre, an all-time high.
  • As expected, the USDA increased Brazil’s 2022/23 corn crop by 5 mmt to 130 mmt, but surprisingly left Argentina’s corn crop unchanged from the April estimate of 37 mmt, a 2 mmt cut was expected.
  • New crop corn futures traded to a low of 504 on Friday, the last time new crop corn traded below the $5 level was September of 2021.
  • The US Dollar index rallied sharply this week posting its best performance since September and managed to close back above the 102 level.

Soybeans Fall Sharply This Week.

  • July CBOT soybean futures shed 46-1/2 cents this week to close at 1390.
  • November CBOT soybean futures shed 56-1/4 cents this week to close at 1223-3/4.
  • Using a record yield of 52 bushels per acre with demand expected to rise slightly from last year the USDA pegged 2023/24 US soybean ending stocks at 335 million bushels. This estimate, if realized, would be an increase of 120 million bushels from the current 2022/23 ending stocks.
  • Much like the corn crop estimates for South America, soybean estimates by the USDA today brought an increase of the record Brazilian crop (155 mmt) and no change to Argentina’s crop size (27 mmt). Like corn, the trade had expected an increase to the Brazilian crop but expected a cut to the Argentina number.
  • Brazilian soybeans in the month of April averaged a $91 per ton discount to soybeans out of the US Gulf, this discount has hurt US soybean exports recently.
  • Front month soybean oil futures broke support to end the week closing below 50 cents per pound for the first time since mid-April of 2021. Soybean oil prices are over 40% lower than a year ago.

Wheat Inventories Forecast at 16-year Low.

  • July CBOT wheat futures shed 25-1/4 cents today to close at 586-1/4.
  • July KCBOT wheat futures added 44 cents this week to close at 877.
  • July MGEX wheat futures added 10 cents this week to close at 846.
  • US wheat production came in significantly lower than expected, inventories of US wheat are forecast to be at a 16-year low.
  • US winter wheat yield was pegged at 44.7 bushels per acre, if realized this would be the lowest yield since 2015.
  • Harvested winter wheat acres in Oklahoma are forecast to be down over 2.1 million acres from last year as abandonment in Oklahoma, Texas and Kansas are expected to be well above-average.

Dairy Continues Strong Move Lower

  • Despite some mid week optimism, second month Class III and IV contracts finished lower this week.
  • A three-week trend of higher prices in the Class IV second month contract was broken with the move lower, down 14c on the week.
  • The close lower for the week on the second month Class III contract marks the third straight week lower, down $1.35 for the June contract during that time.
  • None of the spot products finished in the green this week; cheese and butter were big movers, losing 6c and 4c per pound, respectively.

Author

Keegan Madigan

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