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Ag Market View for May 20

Soybeans, soymeal, soyoil and wheat traded higher. Corn traded lower. US stocks were higher. Crude as higher. US Dollar was lower.
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SOYBEANS

Soybean traded higher on word that China was a net buyer of new crop US soybeans. Current Brazil and Argentina soybean prices are a discount to US. New China buying is for crushers. Some hope that China will soon begin to buy new crop US soybeans for their reserves. Weekly US soybean export sales are estimated near 500-1,000 mt and new crop 300-600 mt. Some feel total sales could be near 1,000 mt. Last weeks sales were near 656 mt old crop and 440 mt new crop. USDA est US 2091/20 soybean exports near 1,675 mil bu versus 1,748 last year. Some feel final exports could drop another 25-75 mil bu without new China buying. USDA estimates US 2020/21 soybean exports to increase to 2,050 mil bu. This will be key if end stocks will drop to USDA guess of 405 mil bu versus 580 this year. 

CORN

Corn futures slipped lower. Overnight, China announced they would soon begin to sell corn from their reserves. This weighed on China Dalian corn futures. Some had hoped that given low corn prices that China would buy US corn for the reserves. Weekly US ethanol production rose 7 pct from last week but is still down 38 pct from last year. Stocks dropped 2 pct from last week and are now up only 1 pct from last year. Weekly US corn export sales are estimated near 500-1,000 mt old crop and 200-400 mt new crop. Last week, old crop sales were near 1,073 mt and new crop was 554 mt. Weekly US corn export sales need to be near 1,100 mt to meet USDA goal. July corn remain in a broad range between 3.00-3.40. Managed Funds are large net short corn futures and options. It will take a weather problem to move futures over resistance. Trade volume remains low. Open interest remain near season lows. Trade expectations that USDA will lower US ethanol demand and raise 2019/20 carryout limits the upside in prices. 

WHEAT

Wheat futures are supported by higher new crop Russia export prices. Europe and parts of Russia weather forecast is dry. This and record high Russia flour prices is supportive.French futures continue to trend higher. There is talk that Russia could consider extending limits on export quotas past June until more is known about their 2020 crop. Today one group even suggested that Russia 2020 crop may be no larger than last year. USDA estimates the crop near 77 mmt versus 73 last year. USDA also estimates Europe 2020 crop near 149.0 mmt versus 146 last year. Some estimates are lower than 140 mmt. Fact most World buyers are uncovered for import needs could help support prices. July Chicago wheat is trading off recent lows. Today’s price action could suggest some reversal in prices and seasonal lows. Higher new crop Russia export prices could trigger short covering.

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