Grains started the week with a continuation of last week’s selling. Going into the morning break, wheat was down 7 cents a bushel, soybeans were off 6 cents and corn gave up 2 cents a bushel.
In wheat, US prices continue to be uncompetitive in generating global trade deals. Last week’s tenders by Egypt went to Romania and Russia, and over the weekend it was announced that Russia was the lowest offer in an Iraqi tender. While US prices and stockpiles are both bearish, international weather has not been cooperating for ideal crops abroad. Rain of less 0.2 inch has fallen across the entirety of agricultural regions of Ukraine. The same can be said for the entirety of Russian winter wheat areas (Southern, Central, and Volga districts). With winter wheat undergoing grain fill, the crop would greatly benefit from additional moisture and will likely not reach full yield potential should dryness continue.
For corn, good weather in the US has kept prices on the defensive. Crop ratings released after the close today are expected to be around 74% good to excellent. In China, government policies are being implemented to force domestic users to utilize more government-owned corn in their stockpiles, and rely less on imported cheaper substitutes like milo & barley. U.S milo exports have surged in the past 18 months thanks to new found Chinese business so this new bushel by leaders in Beijing would out a big damper on US milo premiums that have been trading well above corn in the past year.
In soybeans, rains in the Southern Midwest continue to be a mixed bag. On the one hand it is slowing farmer planting but on the other hand it is providing beneficial moisture to benefit the crop long term. Traders are currently betting on the benefits of moisture and are less worried about the crop getting in the ground. Today at 11 am CDT NOPA is going to announce its May crush estimate which is projected to be 147.299 MB. If realized this would be a record for May crushing.
