Wheat is topped out at midday:
July Corn +19 1/4 cents/bu (8.00 1/2)
July Soybeans + 6 1/4 cents/bu (16.52 3/4)
July Chi Wheat +70 cents/bu (12.47 1/2)
CDn $ +0.00285 (77.605 cents)
WTI Crude Oil +2.25/barrel (112.71)
Wheat’s back must be sore from carrying the grains today! 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.
Today after the close we will get the crop planting progress report which is expected to show major increases since last week. Last Monday corn was 22% planted, soybeans 12% and spring wheat 27%. With favourable weather conditions across much of the Midwest, it is expected that this week’s numbers will majorly jump, potentially putting pressure on futures. The report last week was favourable to futures as it showed that much of the crops had not been planted yet which evoked concerns about un-ideal planting windows and lower yields. That being said, if progress numbers don’t reach the 5-year average, that could be construed as bullish. Now we will have to wait and see!
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).
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.