Cash Grain Markets

slightly bearish as it rose by 9,000 barrels per day to 976,000 bpd. Stocks fell 943,000 barrels to 23.36 million barrels. Net margins improved a nickel to 47 cents per gallon. Gasoline demand fell by 893,000 bpd to 8.6 million bpd. Brazil is studying the possibility of raising the mandatory ethanol blend to 30 percent. It currently is 27.5 percent.

China unloaded a 53,000 metric ton corn cargo from South Africa this week with another 55,000 metric tons on its way. This was more than China has sourced from South Africa in all the previous volumes! In the last 10 years, they have imported just 37,800 metric tons of South African corn. The purchase was reportedly made a couple of months ago when South Africa was competitive. South America now has the honor of the cheapest origin. China seems to be expanding its options for sourcing corn. Last year, they reached an agreement to import Brazilian corn.

Grain prices are effective cash close on May 9. *Cash grain price change represents a two-week period.

before bouncing higher. This helped to cut weakness stemming from favorable planting weather and a lack of any fresh export sales announcements.

Brazil’s safrinha corn outlook is promising with good weather as their crop reaches the halfway point in development. The Buenos Aires Grain Exchange stated they may have to lower Argentina’s corn crop estimate of 36 million metric tons with harvest at 20 percent complete with early yields disappointing. The U.S. Department of Agriculture is pegging Argentina’s corn crop at 37 mmt.

The Federal Reserve raised interest rates 25 basis points to 5-5.25 percent this week after their meeting. This was expected and baked into the market. Their remarks were interpreted that new hikes may be paused for a while and there’s a possibility of a rate cut by September.

Weekly export sales were on the low side of expectations after China’s recent cancellations. Weekly old crop sales were net cancellations of 12.4 million bushels. China has just 2.9 mmt of U.S. corn left on the books for this marketing year compared to 5.8 mmt last year. Old crop sales are down 35 percent from last year with total commitments at 1.501 billion bushels. The USDA is looking for a 25 percent decline in year-on-year exports. We need weekly sales to average 15.7 million bushels to hit the USDA’s 1.85 billion bushel target. This may be difficult with Brazil on its way to a record corn crop. New crop sales were 4.8 million bushels, bringing total commitments to 100 million vs. 195 million last year. China was on their May Day holiday until May 4 when they returned to see their corn market set new contract lows at an equivalent to $9.64 per bushel. Brazil’s corn for July was reportedly trading at a $35 per ton discount to the U.S. Gulf.

The weekly ethanol production was neutral to

As of April 30, U.S. corn planting was 26 percent complete, right on average. The average for U.S. corn planting for May 7 is 42 percent complete and is estimated to hit 45 percent or higher. Illinois was 40 percent complete vs. 29 percent average, Iowa 29 percent complete vs. 34 percent average, and Minnesota 5 percent complete vs. 23 percent on average. Corn emergence was 6 percent vs. 5 percent on average.

As of May 1, Brazil’s first corn crop was 80 percent harvested and Argentina’s was 20 percent complete. Argentina is behind the 32 percent average. The BAGE warned they may have to lower their 36 mmt corn production forecast due to disappointing early yields. The USDA has Argentina’s corn production at 37 mmt.

Outlook: A wild week in the agricultural markets this week with unexpected developments in the Black Sea region. A weaker dollar also provided support, but planters rolling across the Midwest were and will continue to be a limiting upside factor. We need to see some export demand. We didn’t have a daily export sales flash this week. The May 12 World Agriculture Supply and Demand Estimates report will be our first official glimpse at the 2023-24 balance sheets. Trade estimates have not hit the street yet.

For the week, July corn rallied 11.5 cents to $5.96.5 and the December contract was 7 cents higher at $5.34.75 per bushel.

In the last five years, December corn has tended to rally in the first half of June; but in the last two years, the December contract high for the May-June time frame was in early May.

SOYBEANS — Soybeans took a jump higher to begin the week in old and new crop. After a spike lower early in mid-week trading, soybeans rebounded higher on the drone news and extended the gains into the weekend. July soybeans traded to their low-