** 6:30 AM CST CBOT Prices: July soybeans are up 7.00 cents at $9.5175, July corn is up 2.00 cents at $3.68 while July wheat is up 4.00 cents at $4.2975.
** AgResource AM Grain & Oilseed Comment: Good Morning! The overnight CBOT trade is in recovery as combative presidents in the US and Brazil take center stage. In a 5 minute address to the nation, Brazilian President Temer argued for his innocence and promised a long fight against corruption charges. And at an afternoon press briefing, US President Trump denied involvement with the Russians and that certain democrats were on a “witch hunt”. Both Presidential comments have calmed currency markets, which following the sharp fall in CBOT soybean prices on Thursday, should offer some stability into the weekend.
Export sources argue that Brazilian farmers sold 2.3-2.8 MMTs of soybeans yesterday as the Brazilian currency plunged to 3.38 real vs the USD. Such cash sales will help refill the cash pipeline. And the new cash supply pressured fob vs fob price spreads with US soybeans from the Gulf now $4-5/MT cheaper than Brazilian offers. US fob soybeans earlier in the week carried a $7-8/MT discount which allowed China to source 5-7 cargoes. The current spread does not incite importers to shift US soy purchases back to Brazil. For the week, CBOT soybeans are down 11 cents, corn is down 3 cents with wheat off 4 cents
The Central US weather forecast is just cold for the next 2 weeks with temps averaging 7-15 degrees below normal as Canadian air rotates southward along a slow moving Trough. Frosts will be common across the N Plains, Canada and the N Midwest in coming mornings. The chill will further delay summer row crop growth and emergence with heavy rains shifting eastward during the weekend.
5 day rainfall totals are estimated in a range of .5-3.00” with a few locally heavier amounts. Rain potential will be reduced early next week with lite showers being featured under cloudiness. High temps will ranging from the upper 50’s to the mid 70’s across the Midwest.
The extended range forecast has the GFS offering some moderation, but the EU model holding onto the cold. We argue for a blend with cool weather and an increase in showers/storms across the Plains as the warm air shoves northward.
CBOT open interest totals from Thursday show soybeans up 10,499 contracts, corn up 20,317 contracts with wheat up 5,444 contracts. Funds added to their net short positions with funds net corn stance near record large.
France reported a modest fall in their wheat crop condition with 75% of their wheat crop rated GD/EX compared to 76% last week. The French wheat crop appears to be struggling with dryness that persisted into late April.
In world markets, Malaysian palmoil closed up 12 ringgits at $2,757/MT while Dalian September corn futures were up 2 cents/Bu at $6.06 and September Dalian soymeal lost $5.00/MT to close at $397.70/MT. Paris September wheat is up $.50 euros at $166.50 euros/MT. Old crop EU and Russian wheat stocks are tight.
Too cold for the Central US/Canada and too hot for N China are the weather features heading into the weekend. We would buy a break for the coming weather uncertainty heading into the summer. This is no place to turn bearish of grain!
