Morning Comments – May 24th

Headlines

  • Weekly ethanol production declines.

  • Export sales mostly within expectations.

  • Grains continue higher in the overnight.

  • Export sales of 264,000 metric tons of soybeans for delivery to unknown destinations during the 2018/2019 marketing year.

  • Cancellations of export sales of 132,000 metric tons of grain sorghum for delivery to unknown destinations during the 2017/2018 marketing year.

Grains are higher in the Overnight

  • December corn closed above its previous high on Tuesday and is trending.

  • November soybeans are at the high side of the trading range and may test the April high today. If soybeans close through $10.60 prices, it could impulse higher as short positions established due to trade war concerns are covered.

Ethanol Production

  • Weekly ethanol production declined to 1.028 million bpd from 1.058 million bpd LW.

  • Weekly production was 1.8% ahead of LY pace during the same week.

  • Ethanol production is still on pace to meet USDA expectations.

  • Ethanol stocks rebounded last week to 929 million gallons from 903 million gallons the week before.

  • Ethanol stocks have been trending lower since mid-March, and will likely return to that trend as we move through the summer driving season.

U.S. seeks better access for GMO crops in China

  • According to a Thomson Reuters article this morning, the United States is looking for better access to import GMO crops into China as a part of the trade deal under discussion.

Brazil oil company Petrobras temporarily cuts diesel prices

  • Petrobras cut diesel prices by 10 percent in an effort to resolve the trucker strike that is disrupting the movement of newly harvested grains to export facilities.

  • The cut in diesel prices will only be in effect for 15 days, and the government has struggled to reach a lasting solution.

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Export Sales

  • Export sales were on the low side of expectations for soybeans this week with the large 894,500 MT cancellation announced last week showing up in the report.

  • Despite the net cancellations in soybeans it is a positive development that China‚Äôs Sinograin is back in the U.S. market and that the first cargo of U.S. soybeans was purchased by a Chinese importer yesterday.

  • Corn sales were down 13 percent from last week but above the 4 week moving average.

  • Wheat sales were up 78% from last week and were on the high side of expectations for both old and new crop.

Actual

Estimated

Last Week

Wheat-OC

112

(-100)-100

63

Wheat-NC

340

100-400

131

Corn-OC

854

700-1,100

985

Corn-NC

273

100-250

129

Soybeans-OC

-139

(-200)-400

281

Soybeans-NC

6

200-400

224

Soymeal-OC

239

100-400

376

Soymeal-NC

0-100

45

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