Highlights, Broilers, Markets & Rain Days Update 6/2/22

Wright Team
Jun 1, 2022
3 min read

Highlights

USDA announced yesterday morning the sales of:

66,000 mts of old crop beans to China

66,000 mts of new crop beans to China

The Biden administration is likely to raise 2021 US ethanol blending mandates to above the figure proposed in December. That sent US renewable fuel credit (RIN) prices up 5% yesterday. Yes, 2021… Only the US government can change rules after a marketing year is over. The good news for corn producers is the reoccurring rumor that the government will do away with or reduce the ethanol mandate is not going to happen.

The USDA reported 181 million bushels of soybeans were crushed in April; a half million more than the market expected. It is the second highest soybean crush ever for an April. Corn crush for ethanol in April was 414.7 million bushels, down about 39 million bushels from the March crush and below the 3.3 million implied by EIA weekly ethanol production. Monthly corn for ethanol needs to average 454 million the last four months of the marketing year to reach USDA's S&D demand estimate of 5,375 million. Energy Information Administration (EIA) predicts 5,320 million bushels of corn will be crushed for ethanol this marketing year.

The old crop soybean demand looks like another 50 to 60 million bushels is coming off the old crop carryover. Record export sales pace of new crop beans implies USDA is underestimating new crop bean demand as well. Both old and new crop soybean carryovers are closer to 200 million bushels than USDA's May S&D of 235 million bushels of old crop and 310 million new crop. That would take both years’ carryout down to a 16 day supply. That is $18 plus to $19 July or August bean futures.

Last year, December corn contract high was 6.38 on May 7th. Two weeks later, December traded $1.38 lower at an even $5.00. Two weeks after that, December corn was $1.28 higher at $$6.18¼. Yesterday’s December corn low was “only” 84 cents below the contract high made May 12th this year. Corn futures will not stay nearly a dollar or more below the high until the market sees a successful crop in the field and that is at least a month away.

Broilers Update

Last week:

Broiler egg set was up slightly than the same week a year ago.

Broiler egg hatch was up 1% than the same week a year ago.

Market Data

This morning:

Crude oil is at $112.96, down $2.30

The dollar index is at 102.42, down 0.08

July palm oil is at 6,652 MYR, up 46. The contract high was made April, 29th at 7,229 MYR. Palm oil owns 36% and soybean oil owns 28% world market share.

December cotton is at $116.02, down $2.41 per cwt. The contract high was made May, 17th at $133.79 per cwt. Cotton competes with soybeans and corn for acres.

July natural gas is at $8.703, up 0.007. The contract high was made May, 26th at $9.447. Natural gas is the primary cost to manufacture nitrogen fertilizer.

July ULSD is at $4.0703 per gallon, down 0.0730. The contract high was made yesterday at $4.1716. ULSD stands for Ultra Low Sulfur Diesel.

Rain Days Update

The Western Corn Belt has 4 more rain days in the 10 day forecast than yesterday and the Eastern Corn Belt has 1 more rain daysthan yesterday.

The 6 to 10 day forecast updated every day at: https://www.cpc.ncep.noaa.gov/products/predictions/610day/