Grain Comments: 05-25-2023

Good morning:

Overnight volume was weak, and the grains lack direction so far this morning, though the path of least resistance remains lower with the 2023 U.S. campaign off to a solid start and U.S. export flailing. The bulls need to see a pickup in buying, particularly in soybeans and particularly from China, but that spark has been slow to arrive as a record Brazilian crop dominates the market. Net sales cancellations are possible once again in this morning’s weekly export sales numbers, this time for all three main crops.

Rains fell in the panhandles and central Texas over the last 24 hours along with eastern KS and OK; action remains in the southern Plains this morning and through the weekend, not to mention for both the 6-10- and 11-15-day time frames as a ridge continues to separate an active Plains and far WCB from a dry central and eastern belt. Temperatures continue safely above normal up through at least the first week of June now.

Brazilian rains were heavy in the far south over the past 24 hours, expanding in the south through Monday then moving into the north and northeast next week for the 6–10-day time frame, aiding any dry safrinha crop regions.

Trade will once again be heavily vested in today’s export sales report data. AS it has been in recent weeks trade will not be as interested in new US sales but rather what we may see for cancellations. China again cancelled corn purchases from the US which will show up in today’s data. After recent cancellations and some shipments China has just over 70 million bu of corn to arrive from the US. Given current market economics it would not be surprising to see more corn washed out of. We are now seeing cancellations on soybean bookings as well as South American offers continue to fall well below those of the US. The Us has a larger volume of unshipped soybean sales that could be cancelled as the year progresses. These cancellations have started to alter ending stocks estimates. Trade is now starting to look more at new crop export demand, which is very low, with new crop soybean sales record low for this time of the year. Larger world production is severely limiting demand for US offers at this time and may give us larger carryout than the USDA is currently predicting. Once again trade will be focused on weather in today’s session, but we will also start to see more pre-holiday positioning as well.

Have a great day!