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Planting Progress, ENSO Update, Export Inspections, Put Options, Markets & Rain Days Update 5/17/22

Highlights



The NOPA Crush Report for April released late yesterday morning was 169.79 million bushels. The market expected 172.37 million bushels of soybeans. Oil stocks at the end of April were 1.814 billion, well below the market’s expectation of 1.886 billion pounds, which is good sense the bushel quantity crushed was less than expected.


The April crush was about 9 million bushels less than the March crush. None-the-less, the April 2022 crush was 5.9% higher than April a year ago and the second-largest April crush on record for NOPA members, behind only 2020. The soyoil inventory is the smallest since September when we ran out of soybeans to crush.


China’s spot month soybean futures contract was up 51 USA cents Monday.


The Wheat Quality Council HRW tour commences today, leaving from Manhattan, Kansas.


Informa Economics estimates the 2022 HRWW crop to be 590 million bushels, down from 749 last year. Informa sees bean acres at 89 million vs. USDA March Intentions at 90.9 and 87.2 last year. They see double crop bean acres at 4.5 million compared to 3.7 last year.


China’s industrial factory production has been tracked for 32 years. April was only the second month in 32 years that the industrial production contracted. You may recall the Purchasing Manager Index (PMI) was sharply lower for April and May. Certainly the COVID lock-down was the culprit. Given China is the world’s number one crude oil importer, why was crude oil so strong yesterday? On the other hand, China’s daily coal production was 12.09 million mt in April, up 11% from a year ago. The all-time record of 12.77 million mts per day of coal production was achieved in March. Their coal inventory on May first was 25% more than a year ago, yet China’s government economists say the economy is going to continue to contract for another two to three months at least. Are they trying to buy crude oil and soybeans cheaper?


Without a doubt, soybeans have the most upside price gains potential in the coming months technically and fundamentally.


The United Nations Secretary General proposed to ease restrictions on the export of potash fertilizers from Russia and Belarus in exchange for the passage of vessels with grain from Ukraine to save the world’s children from starvation.

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