Morning Comments/Roy's (RJ O'Brien)

Morning Grain Comments - May 2 2024

CORN: Green on the screen this morning with green on the radar in the Midwest and southern Brazil.  Also, money flow into the grains/oilseeds seen with Europe and others returning overnight from May Day holiday.  Some attribute the money flow toward macro influence (US Fed's comments about interest rates yesterday) while others believe the capital flow due to weather and production concerns with the coming growing season.  Short term the Midwest weather maps are wet with little progress expect to be made until next week.  Open interest in corn up over 12k contracts on yesterday's price action. Ukraine's govt giving 1st estimate for 24/25 of corn and wheat exports and look for corn exports to fall from 27 mmt to 20-21mmt.  Increased US farmer selling of old crop expected toward $4.60 July where the 100-day MA lies.  New crop selling expected to be more muted given the weather forecast.  Weekly export sales this morning in the range of estimates.  A close above $4.60 in the July would open the door toward $4.68-4.70.  

WHEAT: US Wheat is higher as some of the weather maps back off on rain amounts for the southern Russia wheat areas (the EU model lining up more with the drier GFS/Canada model).  Ukraine looking for wheat exports in 24/25 to from 18 mmt to 14mmt.   Jordan tenders for 120k tons of option origin wheat.  US weekly export sales in the range.  Western KS to see some moisture in the expected in the next 10 days.  

SOY-COMPLEX:  Beans and meal surging overnight as flooding and excessive rains continue to do damage to southern Brazil where 25-40% of the soybean crop is to come out yet.   Rain amounts of 12-16 inches of rain seen the last few days and another 4-9 inches of rain expected the next 10 days.   Chatter about production loss ranges from 2-5 mmt.  Since Brazil's crop was so large at 155 mmt, a loss of 5 mmt is tolerable.  But it does make other grower’s reluctant sellers.   China reported in booking 2-3 soybean cargoes for June slot out of S America overnight.  US weekly export sales on beans in range of estimates while meal on the low side.  Interior US soybean basis firmer at the processors with most bidding for beans under the July now.   Next resistance for SN toward $12.00.