Perspective: Mid-Day Commentary for May 1

By: Arlan Suderman, Chief Commodities Economist

Mon, 01 May 2023, 16:11

Perspective: Midday Commentary

Arlan Suderman

Chief Commodities Economist

May 1 - This morning's economic data came in as good as, or better than, expected, leading to a mixed board on Wall Street as we approach Midday, as traders consolidate positions ahead of Wednesday's Federal Reserve announcement. The VIX is trading just below 16, after setting a fresh 18-month low. The dollar index is notably higher near 102.2, while yields on 10-year Treasuries are trading near 3.55% Crude oil prices are nearly 2% lower, while the grain and oilseed sector is trading mixed to weaker. Soybean prices were the strong leg of the grain and oilseed sector this morning, posting modest gains across the board following last week's collapse. Corn prices tried to hang with soybeans, but big double-digit losses in wheat made that difficult. Wheat prices are trading seasonally weaker, with traders no longer worried about the drought in the Plains following last week's rains, even though a short crop is still expected. We'll learn more on that when USDA releases its first field-based survey of wheat production next week.

USDA inspected a marketing year high 59.8 million bushels of corn for export inspection in the week ending April 27, continuing the roller coaster ride of a good week, followed by a poor week, and then repeating again. Last week's inspections also included 14.8 million bushels of soybeans, 13.2 million bushels of wheat and 4.3 million bushels of grain sorghum. The portion of the above that was inspected for shipment to China included 8.0 million bushels of corn, 7.2 million bushels of soybeans, 4.3 million bushels of grain sorghum and 0.07 million bushels of wheat. This brings total marketing year to date corn export inspections to 941 million bushels, down exactly 500 million or 35% from the previous year's pace and down 165 million bushels from the seasonal pace needed to hit USDA's target. However, that's better than the 183 million bushel short fall we saw a week ago. Keep in mind that new sales have really slowed in recent weeks, especially with China's series of cancellations. Marketing year to date soybean export inspections total 1.744 billion bushels, up 7 million from the previous year's pace and 64 million bushels above the seasonal pace needed to hit USDA's target. But here again, recent sales have been quite sluggish, raising questions about whether we'll be able to sustain this shipment pace much longer.

It's all about the weather near-term. Traders assume that a rapidly developing El Nino weather pattern will provide a favorable growing season for trend or higher corn and soybean yields this year, so the next best possible threat would be the inability to plant crops. Near-term, we should see quite a bit of fieldwork unfold across much of the Midwest this week, gathering momentum into next week, with areas of occasional showers. The primary area of concern will continue to be the northern Red River Valley. However, the graphic below for the May 13 - 26 time period shows warm and dry conditions for the region, offering some hope that we will see sufficient drying to get crops planted in that area as well. Crops may not go in as early as preferred, but I remain cautiously optimistic that they will get planted. Also note the wet signal for previously dry areas of the southwestern Plains. This will favor summer row crop planting, while increasing the weed problems in some of the remaining thin wheat stands that will be approaching maturing in that region in the last half of May. Keep in mind that longer-term forecasts tend to struggle in the spring. For example, we remember that the forecasts were calling for a wet April five or six weeks ago. The Midwest ended up having the third driest April since 1979, so we'll need to see the below forecast verify.

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Matt ZellerWed, 05 Aug 2026, 12:39

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Mike CastleTue, 04 Aug 2026, 14:58

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