Morning Comments; Friday, May 29th, 2020
Agrivisor - SETZ - Fri May 29, 6:36AM CDT

The majority of today’s session will be spent with traders getting final month end positions in place. Corn, soybeans, and wheat do not go into delivery this month which will limit some of the positioning we normally see. As we start to transition into June, we will start to see a shift in market focus for price discovery. For one, we will start to see more emphasis on long range weather outlooks as these will now cover a good portion of the growing season. The current outlooks through August indicate benign growing conditions for much of the Corn Belt, but this does not mean we do not have to monitor weather outlooks from a day to day stance. While the heart of the Corn Belt is expected to be mostly favorable, the area surrounding the entire Corn Belt is expected to be hot and dry. It would not take much of a shift and we could see less than optimum conditions develop across the Corn Belt. We will also get a much better indication of planted acres as we move through June. The entire US will be past its final plant date on corn and many on soybeans in a few weeks. This will start to be reflected in the weekly planting and crop progress reports. As it has been, the most attention will continue to focus on the fringe areas where delays have been noted. This does not mean we will not see focus shift away from the heart of the Corn Belt as flooding has been reported and there may be a need for replanting. That said, insurance remains a better economic choice than forcing a crop in the ground and we could easily see planted acres decrease in this region as well.

Highlights

* Chinese trade news conference to be held today

* NYSE re-opens, has ¼ of normal floor traders

* CME to reopen in three weeks

* EU to release Covid relief package

* Japan to invest $1 trillion in its economy

* Gasoline demand on Memorial Day -35% from year ago

* Russia may increase crude output in July

* IGC predicts record world grain production this year

* World grain carryout to rise for 1st time in 4 years

* Heat building in western US

* Month end positioning to dominate trade

Corn

* China sells entire 4mmt at auction

* So Africa crop +38% this year

* US stands being questioned

* EU imports -4.4 mmt from year ago

* Safrinha harvest underway

Soybeans

* US soybeans a 15c discount to Brazil

* Higher Brazil cost not deterring exports

* Brazil to expand plantings this fall

* Funds continue to hold long position

* Ukraine turns to soybean imports

Wheat

* Ukraine values up 6% on supply worries

* Ukraine has now reached export quota

* Winter wheat crop in Ukraine -23.3 mmt

* Black Sea rains too late to benefit crop

* US winter crop benefits from rains

Livestock

* Boxed beef continues to fall

* Choice beef -16% from high, still up 55% from pre-Covid

* Consumer demand rises

* No sales on weekly FCE auctions

* 2 million head of hogs waiting for packer openings

This commentary is the sole opinion of Karl Setzer, Senior Commodity Risk Analyst for AgriVisor, LLC. This is intended for informational purposes only and not to be used for specific trading recommendations. The information used to generate this commentary is gathered from a variety of sources believed to be accurate. If you have any questions or would like additional market information, feel free to send an e-mail to ksetzer@agrivisor.com.




 

Market Commentary provided by:

Karl Setzer Grain Commentary