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May 16th- Closing Market Commentary

05/16/2022
May 16th- Closing Market Commentary

Limit-up for wheat today:

July Corn +28 1/4 cents/bu (8.09 1/2)

July Soybeans + 10 cents/bu (16.56 1/2)

July Chi Wheat +70 cents/bu (12.47 1/2)

CDn $ +0.00550 (77.870 cents)

WTI Crude Oil +3.71/barrel (114.20)

The Crop Progress and Conditions Report is the big news that was released after my midday market commentary. Overall, crop planting progress did not reach 5-year averages which may be seen as bullish despite a large bearish increase. Since this report was released after the market close, grains will be ready to react to this story overnight and tomorrow morning. In addition to slow planting, corn emergence is being shown as very sluggish which could be an early sign of greater problems with the crop (14% compared to 32% average).

Corn: 49% Planted (22% Last Week, 78% Last Year, 67% Average) – North Dakota’s planting progress is a measly 4% and some of these areas are running low on time.

Soybeans: 30% Planted (12% Last Week, 58% Last Year, 39% Average) -North Dakota is once again bringing down the average

Winter Wheat: 27% Good/Excellent (29% Last week, 47% Last Year, 51% Average)- Texas is weighing that crop down

Spring Wheat: 39% Planted (27% Last week, 83% last year, 67% average)- North Dakota is once again slow and they were expected to plant 46% of the U.S. spring wheat acres this year… those might be up in the air now.

Biggest Movement Story of the Day: July wheat futures hit limit up today amid the India wheat story. India announced a ban on wheat exports out of their country after a heat wave damaged some of the growing crop. India announced that they are keeping all domestic wheat within the country to support food security and try to cope with high inflation. Since the Russia-Ukraine war, India has picked up much of the slack as the exports slowed out of the Black Sea region. With this pattern, the USDA estimated the country exporting a record 8.5 million mt in the 22/23 crop year- which is EXTREMELY overexaggerated now. (This year their exports grew from 2.6 million mt to 8 million mt). This decrease on available global supply has greatly boosted wheat futures as the trade digests this news. On the Minneapolis Grain Exchange, Hard Red Wheat futures soared to their highest price in over 14 years amid India’s export ban news. One “hole” in this export ban that traders seem to be avoiding is that the government of India is still prepared to allow exports back by previous issued letters of credit, as well as to countries that request supplies “to meet their food security needs”. This means that the export pipeline out of India is not completely closed, but it is still limited.

This morning we got the weekly export inspections report which highlighted corn exports at 40.8 million bushels (58.5 average, 58.2 last week, 29-5-68.9 estimated), soybean exports at 28.8 million bushels (25.8 average, 18.5 last week, 9.2-29.4 estimated), and wheat exports at 12.8 million bushels (12.9 average, 9.7 last week, 3.7-14.7 estimated). Overall, corn inspections were as expected, while soybeans and wheat treaded on the high end of expectations. Marketing year to date corn export shipments exceed the seasonal pace needed to hit USDA's target by 57 million bushels, up from 37 million the previous week. Marketing year to date soybean export shipments fall short of the seasonal pace needed to hit USDA's target by 35 million bushels, versus being short by 48 million the previous week.

The NOPA Crush Report for April was also released today. It showed crush at 169.8 million bushels (down from the estimates of 172.4, and down from the previous month’s 181.8, but up from this time last year of 160.3). In terms of bean oil stocks, stocks hit 1814 million pounds (also down from the estimated average of 1839, the previous months 1908, but up from this time last year of 1702). This is disappointing to see given the ambitious demand numbers the USDA has factored into their current estimates.

Funds were thought to have been all buyers today.

Just a friendly reminder that Floyd is on vacation this week, so you can expect to hear all the commentaries from me (whether that is good or bad is up to you! 😉) ! If you have any market-related questions or want to chat, please feel free to reach me at the Wanstead branch 519-845-3301 or on my cell 519-328-2623.


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