Weekly Market Update 5-9-24

Here is your weekly market update from the Garden City Co-op Grain Origination Team.

Trivia

1. Who was credited with creating the world’s first car?

2. How old was Rose in the Titanic movie when she was recounting her story?

Answers at the bottom.

Market News

RUSSIAN WHEAT: Two of Russia’s key grain growing regions are reporting that May frosts have caused damage to their crops, which could reduce this year’s harvest. Temperatures early this month fell near 23°F, with major concerns being in the states of Lipetsk and Voronezh. These regions have declared a state of emergency which would enable farmers to receive subsidies and insurance payments. Analysts have already reduced their forecasts for 2024 grain production due to dry weather in the south, but the impact of this frost has not yet been included in their forecasts. The market will continue to watch as this develops as it relates to prospects for US wheat exports.

MAY WASDE: USDA will release the May WASDE Report tomorrow at 11AM, estimates are included in the table below. May is always an interesting report because it’s our first look at the 2024/25 balance sheet. Expect market volatility – be sure to get orders working if you have new crop or old crop bushels you are looking to price. CORN: USDA gave us a good idea of what to expect for total corn production, with 90 million acres of corn estimated to be planted in the March report and a 181 bu/acre yield estimate at February’s Ag Outlook Forum – making total production estimated somewhere near 14.8 billion bushels. The average trade guess for new crop ending stocks is 2.284 billion bushels, which would be the highest in eight years if realized. The market is also interested in what USDA will do with South American production, especially Argentina. Buenos Aires Grain Exchange has continued to lower their estimates of the crop and are significantly lower than USDA’s current estimates. SOYBEANS: Based on USDA’s previous estimates of 86.5 million soybean acres and a 52.0 bu/acre yield, total soybean production is likely to be somewhere around 4.44 billion bushels. This would be the highest in three years and up from last year’s 4.165 billion bushels. The average trade guess for new crop soybean carryout is 431 million bushels, which would be the highest U.S. ending stocks in five years. World soybean stocks in the new 2024-25 season are expected to increase to a record-high 120.0 MMT, an assertion that has a long time to be challenged. WHEAT: USDA previously estimated planted acres at 47.5 million and had yield pegged at 49.5 in their February estimate, which would put U.S. wheat production somewhere in the neighborhood of 1.9 billion bushels. Ending stocks are estimated to come in around 786 million bushels. Exports will be an interesting piece to watch in this balance sheet. U.S. wheat has struggled to be competitive, but prospects largely depend on what kind of crop Russia is able to grow.  World wheat production will also get attention tomorrow, with traders already noticing drought in parts of Canada, excessive wetness in parts of western Europe, dry conditions and potentially damaging cold in southern Russia, and dryness in western Kansas.

EXPORT INSPECTIONS: The amount of inspected corn has remained steady, with 50.6 million bushels being shipped out over the past week. As expected, Mexico and Japan were the two largest recipients of corn. The U.S. is still ahead of pace, with 33.7 million bushels more than the USDA estimate. However, with only four months left in the marketing year and the peak of exports behind us, we need to continue seeing steady grain movement to successfully wrap up the marketing year. Wheat inspected barely caught the bottom of the estimated range at 11.8 million bushels, with SRW being shipped to China and HRW to Mexico. Soybeans were in the range of estimates with 12.8 million bushels, with Mexico and China being the main destinations. Milo shipped 5.4 million bushels, which almost doubled the prior week.

 EXPORT SALES: Corn sales for the past week, while strong historically, were less than stellar, falling towards the lower end of trade estimates, with only 35 million bushels sold, with 1.9 million bushels NC sales. Wheat, on the other hand, saw below estimate numbers with 1.5 million bushels sold currently; however, it managed to lock in 14.9 million bushels for new crops, indicating a potential increase in future sales. Soybeans reported 15.8 million bushels with 200,000 for new crops, maintaining a steady sales performance. Milo, with one of its better weeks, saw 2.4 million bushels, no new crop sales, and below the 10-week average.





Weather: Winds coming out of the North today around 11 mph, mostly sunny, with a high around 72°F and the lows expected to hit temperatures around 43°F; similar weather anticipated on Friday. We have a 20% chance of rain Saturday afternoon, with a chance of rain and thunderstorms expected later in the day and a high near 77°F. It looks like we can expect a 60% chance of precipitation Saturday night into early Sunday morning, with total rainfall estimated between a tenth and a quarter of an inch. Sunday looks like the greatest chance for rain; 70% chances estimated across the day, with scattered thunderstorms and intermittent rainfall. Scattered chances of rain and thunderstorms exist throughout the remainder of the week, with our greatest chance of rainfall being Monday and Wednesday. Temperatures are expected to be in the upper 70s with lows remaining around the mid-40s throughout the remainder of the week.

Trivia Answers

1. Karl Benz

2. 100 Years old