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May 11th- Closing Market Commentary

05/11/2022
May 11th- Closing Market Commentary

Grains were strong to close:

July Corn + 13 1/4 cents/bu (7.88 1/2)

July Soybeans +14 1/2 cents/bu (16.06 3/4)

July Chi Wheat + 20 1/4 cents/bu (11.13)

Cdn $ +0.00255 (77.015 cents) ß Back up over 77

WTI Crude Oil +5.95/barrel (105.71)

After sharp declines on Monday, grains used today to throttle itself close to where we started out the week. With the USDA report to be released tomorrow, traders are anxiously waiting for the results. In the words of Forrest Gump, USDA Reports can be like a box of chocolates… you never know what you are going to get!! 😉

The EIA Report was released today and showed increases of 8.5 million barrels to commercial crude oil stocks bringing the total to 967.2 million barrels. Additionally, ethanol stocks increased 0.3 million barrels to 24.1 million barrels, with production only increasing a 21 thousand barrels to day to 991 thousand barrels per day. The crude oil market was soaring today, bringing soybean prices up along with it. Oil Share rocketed to its highest level since the 1985s today when it crossed over 51%.

We are just one day away from the USDA May Crop Report and accompanying Supply and Demand tables which is what markets are mostly looking to and gearing up for.  The estimates for this large report are listed below. Although there are not any major changes expected, due to the history of USDA Report reactions tomorrow could be a wild day for grain prices, as the report will include the USDA’s first release of 2022/23 SnD’s.  Cuts are expected to USA old crop carryouts for corn and soybeans, given the stellar demand that has been seen recently.  Additionally, we expect to see some cuts to domestic corn and soybean yields as a result of delays to American planting (and sustained delays to the Northwest Plains). Lastly, as was reflected in some private estimates released earlier this week, the Brazilian corn crop has been in a very hot period which is causing analysts to predict cuts to those numbers as well.

Funds were thought to be nearly all buyers today.

The story in Ukraine regarding their grain capabilities continues to be somber. This is an interesting infographic found on Twitter which is helpful in identifying the issues Ukraine, a huge exporter of wheat, is having with their movement capabilities. 

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