Written Commentary
MORNING OUTLOOK
Month end. Grains are mixed. SN is up 14 cents and near 17.46. SX is near 15.58. SMN is near 434.5. BON is near 80.08. CN is down 2 cents and near 7.74. CZ is near 7.27. WN is down 22 cents and near 11.33. Range has been 11.23-11.57. KWN is down 22 cents and near 12.12. Range has been 12.07-12.37. MWN is down 15 cents and near 12.89. Range has been 12. 84-13.10.
US Dollar is higher. Crude is higher. Where to start? Last week, GSI commodity index made new highs for the move led by Crude, metals and soybeans. There is talk that China may relax some of its Covid lockdown restrictions June 1. This could increase commodity imports. EU also talking about banning Russia oil.
China may also increase stimulus for resumption of manufacturing and issue new funding pathway for infrastructure projects and local government bonds. EU is trying to resurrect a plan to allow for Ukraine food exports. EU wheat is lower. Russia still wants sanctions to be lifted. Russia continues to escalate attacks on east Ukraine. US domestic corn and soybean basis levels are higher on increase demand.
Nearby soybean are supported by higher US cash levels and talk of higher demand starting Aug 1. China is key if they resume buying US soybeans. Some estimate US 2021/22 soybean carryout at 200 mil bu vs USDA 235. This due to higher exports. Trade also estimates US 2022/23 soybean carryout near 200 vs USDA 310. Key is final US crop. Indonesia announced export permits for palmoil.
Corn futures are lower but near support. US weather is ok but demand will increase especially export. Some estimate US 2021/22 corn carryout at 1,350 mil bu vs USDA 1,440. This due to higher exports. Trade also estimates US 2022/23 corn carryout near 1,100 vs USDA 1,360. Key is final US crop. US domestic corn basis levels are higher on increase demand.
Wheat trying to find a bottom before North hemisphere harvest and with World buyers net short. Talk of EU trying to get Russia to open a corridor for Ukraine exports is again offering resistance to wheat futures. This despite talk of dry conditions in EU, Ukraine, Brazil, Argentina and north China plains. It is still too wet in east Canada prairies and ND. Most have private estimates US 2022/23 wheat carryout near USDA 619 and so far see US 2022 wheat crop near 1,729 mil bu vs 1,646 ly.
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