Morning Comments/Roy's (RJ O'Brien)

Morning Grain Comments - June 1, 2023

CORN: Start of the month and grains/oilseeds are higher overnight.  US House passed the US debt ceiling bill overnight.  US weather maps still have drier pattern for the ECB and northern part of WCB in the 8–14-day maps.  Corn futures building on the rebound from yesterday's lows.  Interesting to note open interest in corn was up almost 13k contracts yesterday and up almost 20k contracts the last 2 sessions.  Resistance for July corn at 50-day MA of $6.05 near term and $6.20 longer term. In other news Ukraine's UGA (grain traders union) looks for corn production to drop from 27.3 mmt last year to 23.3 mmt this year, assuming normal yields.  

WHEAT:  Wheat is higher to start the month after closing well off its lows yesterday.  Saudi Arabia stepping in for a tender of 480k tons after wheat prices have plunged almost $1.00 a bushel since early May.  This along with concerns about China's wheat crop with rains disrupting harvest and milling quality also helping the market today.  Some estimate 20-30 mmt of China's wheat crop has been impacted by the rains with 10-20 mmt of it sprouting (hence not fit for flour milling).  US HRW protein premiums jumped 30-35 cents/bu for some levels. S. Korea tendered for 130k tons of feed wheat overnight and booked 64k tons for Nov arrival.  Russia accuses the grain export corridors as being used to attack Russia.  Do not look for much headway from the UN on getting Russia to renew the export corridor.  Resistance for KWN toward $8.25-8.30 in KWN.  

SOY-COMPLEX: Soybeans and the products are higher this morning to start the month.  Energies are steady to firmer with Malaysian palm oil futures closing higher after its 3-day slump.  US weather forecast remains on the dry side for ECB into the 8–14-day forecast.  CNGOIC report weekly soybean crush increased to 2.04 mmt and close to expectations.  Crush for this next week is expected to increase to 2.2 mmt.  Chinese crushers are thought to be covered through July but still open on Aug and Sept for soybean ownership.  US soybean basis generally steady to firm.  Resistance for July soybeans back toward $13.50-13.60.  Resistance for Nov beans at $12.00.