May supply and demand estimates boost corn, lowers soybean futures | Weekly Commodity Market Update

Brownfield Ag News

This week Will and Ben review USDA's updated global supply and demand estimates and coming changes to trade operations with China.

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Market recap (changes on week as of Monday's close):

➡︎ July 2024 corn up $.03 at $4.72

➡︎ December 2024 corn up $.05 at $4.93

➡︎ July 2024 soybeans down $.29 at $12.19

➡︎ November 2024 soybeans down $.07 at $12.12

➡︎ July soybean oil up 1.31 cents at 45.15 cents/lb

➡︎ July soybean meal down $26.00 at $361.60/short ton

➡︎ July 2024 wheat up $.39 at $6.87

➡︎ July WTI Crude Oil up $.84 at $78.60/barrel

Weekly highlights:

US stocks of crude oil decreased 57 million gallons with stocks of gasoline and distillate fuels increased 37.4 and 23.5 million gallons, respectively.

US ethanol production decreased 6 million gallons to 284 million gallons on the week. This is the same volume during this same week last year. On lower production, higher gasoline demand and a strong month of ethanol exports, ethanol stocks decreased 54.1 million gallons- the fifth straight week of declines.

Economic indicators deteriorated for the most recent week of data. The initial jobless rate sharply increased above expectations to 231,000 people and the preliminary May reading of consumer sentiment fell to it’s lowest level in six months.

Open interest positions of Chicago futures and options positions was -0.1% for combined Chicago wheat contracts+5% for Chicago corn contracts, +4.7% for Chicago soybeans. Soybean oil was -0.2%, and soybean meal +5.5%, while cotton and rice were up 4.4% and 2.9% respectively.

Managed money traders were net buyers decreasing net shorts across the board. Chicago wheats +29,701 contracts, corn +115,527 contract and an all-time weekly record of +107,783 for soybeans.

Global grain and oilseed production estimates continue to move lower. Argentina corn, Brazilian soybeans, and Russian wheat production all were revised lower by their respective trade groups.

US export sales were neutral for grains and oilseeds for the 2023/24 crop and a little bearish for 2024/25 crop. Corn, soybeans, grain sorghum and total wheat sales were all up slightly week over week but within expectations. Corn and soybean sales for 2023/24 lag the pace needed to hit the current export estimates.

USDA’s May World Agricultural Supply and Demand estimates were largely as expected. There were some minor changes to 2023/24 demand numbers with declines in South America production and growing US ending stocks for 2024/25.

Weekly grain and oilseed export inspections were mixed week over week with corn and beans down and grain sorghum and wheat higher. In million bushels, corn a three month low of 36.9 vs 51.1; soybeans: 14.9 vs 13.2; grain sorghum 5.5 vs 5.4 and wheat 13.4 vs 12.5. After USDA’s increase of 50 million bushels of 2023/24 corn exports- corn exports now lag the seasonal pace needed while all other commodities exceed the seasonal pace.

Crop planting progress still increased on the week. Corn planting increased to 49% from 36% but is now well below an average of 54%. Soybean planting at 35% was up from 25% and compares to 34% on average, cotton planting was up 9% to 33% and compared to 31% on average.

The winter wheat conditions rating was roughly unchanged on the week at 334 (perfect is 500) and compares to 280 this time last year.

The Oklahoma Wheat Commission last week estimated 2024 Oklahoma wheat production at 89.2 million bushels with an average yield of 33.7 bushels per acre. Last year production totaled 68.6 million bushels.

Topics:

➡︎ Market recap

➡︎ Corn up, soybean complex mostly down

➡︎ USDA global supply and demand update

➡︎ Ethanol production and export shifts

➡︎ U.S. tariffs on Chinese products

➡︎ Reports to watch

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