This week’s action:
Corn July up 13 at $5.97
Beans July up 18 at $14.37
Feeders August down 8.77 at $221.75
Fats June down 3.50 at $162
Hogs June down 7.825 at $83.55 and a new contract low
Corn Dec23 up 6 at $5.32
Beans Nov23 up 17 at $12.79
KC Wheat July up 71 at $8.33
July Soybeans found another bottom at the 13.90 support and are now nearly 50 cents off sitting right at 14.36 resistance with 14.48 the next upper target. Technical trends are now supportive above 14.34. November futures are supportive but still lagging with potential Northern belt added acres.
July Corn is correcting from oversold levels and trying to rally back above $6.00 and up to the 6.08 futures resistance. Old crop basis seeing strength as the farmer spends time in the field. Some local values exceeding $1.00 over July futures and getting old crop back to $7.00. Net weekly exports yesterday were the lowest on record at a negative 194,682 tonnes following China’s cancelations. Brazil will continue to compete strongly with our US commodity.
Wheat has recovered nicely as conditions improved but remain at some of the worst levels on record. The grain corridor talks this week will have a large impact on movement into the summer harvest.
Grain Corridor talks
Russia, the UN and Turkey will be discussing an extension of the Black Se Grain Export corridor in Moscow today. The current agreement ends May 18th while Russia takes an extended “Victory Day” holiday and the Turkish presidential election takes place May 14th. None the less, there are a lot of geopolitical events going into the May 12th USDA crop report that could spark market movement. It’s been clear the fund sentiment has been one of cutting market risk amongst all the moving parts.
Current weather models disagree going into this week’s moisture expectations as the last 24 hours have offered .25-1.00 across the Midwest, Delta and Plains.
Near term moisture relief turns drier in the 6-15 day forecast. This should offer plenty of opportunities for U.S. crop seeding progress.
Banking and demand fears pressured the livestock sector this week, but front-end cattle have been supportive on cash trade premiums alone, even with KS and TX weaker. Hedgers are confidently offering cattle sale as the rest of the market sits tight on weaker overall cash prices. June sitting at a $10 discount will continue to offer strong support to spot futures. Global and domestic demand also remain strong as weekly exports were the highest since February.
Regional Bank Fear
US regional bank stocks are recovering amid harsh regulatory wording/conversation. US money flow has been on a steady move from US banks to money market accounts. Commercial banks have lost nearly a trillion dollars of deposits since April 2022 and your small regional banks lost 250 billion. This is purely a lack of trust in our US banking system. This is resulting in a sharp decline in the availability of credit and the largest monthly deterioration of loan availability since December 2002, even worse than what was seen through the 2207-2008 subprime mortgage crisis.
Something that probably means nothing:
Over 120,000 mint julep’s and 140,000 hot dogs will be consumed by the crowd at the Kentucky Derby this weekend.