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May 10th- Closing Market Commentary

05/10/2022
May 10th- Closing Market Commentary

Grains were mildly higher to close:

July Corn + 3 1/4 cents/bu (7.75 1/4)

July Soybeans + 7 cents/bu (15.92 1/4)

July Chi Wheat + 0 cents/bu (10.92 3/4) ßFaced resistance trying to get back over 11

Cdn $ -0.00220 (76.760 cents)

WTI Crude Oil -3.33/barrel (99.76)

After a sharp downturn yesterday, grains earned back a slight margin of their losses.

Since midday, a news article has been released which reported that “Russia has attacked Ukraine’s Odesa port in an effort to fracture supply lines and cut off weapons shipments from the West. Odesa is Ukraine’s largest grain port, and damager to this infrastructure would be troubling for long-term trade”. This could be a major issue for Ukraine’s already struggling wheat exports and may result in supply issues. It will be interesting to see how this report impacts trade moving forward.

The USDA May Supply and Demand Report Is due to be released on Wednesday which is causing traders to second-guess their positions.  The May reports will be the first attempt by the USDA to issue an Supply and Demand for the 2022/23 crop year and has major uncertainties.  Tight carry in stocks are expected from the 2021/22 crop year, as the USDA is expected to raise US soybean and corn export projections.  However, what the government does on Thursday in terms of projected 2022/23 demand levels will really tell the tale on market direction coming out of the reports.

Ahead of the USDA report, AgRural cut their 2021-22 Brazilian corn crop estimate by 5 million mt. to 112.3 million mt lending support to the corn story.

Corn is also slightly rallying on the news story that Crop Consultant Dr. Michael Cordonnier cut his U.S. corn yield projection by 1.5 bu. to 177 bu. per acre given the much-slower-than-average planting pace (and falling behind ideal planting windows). Yesterday’s data showed that just 22% of the corn is planted, versus the 5-year average of 50% for this date, with Iowa and Illinois only at 14% and 15% respectively, compared to 63% and 58% on average. That being said, there is expected to be MAJOR progress this week, corn can get in the ground a lot faster now compared to a decade ago. This graphic below shows the maximum amount we have seen planted in a week in the past, showing that we can get closer to average pace quickly if the conditions are right. However, the Dakotas and Minnesota are expecting more rain which could further delay their planting progress and may result in some prevent plant acres or corn switching to soybean acres. With tighter expected carry outs, every acre counts.

The Canadian Dollar continues to plummet amid inflation concerns. $CAD closed under $.77 for the first time since November 2020.

Funds were thought to be all buyers today.

With tractors slowly starting to power up across the county, I wanted to take this time to wish everyone a happy and safe planting season!

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