• HEADLINES: Low volume allows Chicago order flow to push prices; EU cash corn price soars on limited supply; Seven ships grounded in Parana River.

• Low volume and mixed are Chicago grain futures at midday. Soybeans/soyoil have been able to recover while corn/wheat hold with modest midday losses. The volume of trade is well down from recent days as few desire to add to their market risk heading into the weekend. Europe is closed for a holiday Monday with the US off next week Monday for Memorial Day. The market has a feel of apathy after early selling could not break key chart support at $13.50 basis November soybean futures. July soybean and corn futures are bouncing on the spreads, but cash markets are little changed. We anticipate a mixed Chicago close.

• Chicago brokers estimate that managed money managers are flat in corn and wheat including the overnight session, while buying a net 2,100 contracts of soybeans. In the products, funds have sold 900 soymeal while buying 2,100 contracts of soyoil. Long oil/short meal spreads are back in vogue.

• FAS did not release a China corn purchase for the first time this week. The lack of a daily sale does not indicate that China has finished its new crop corn buy program. We hear that China has additional corn demand to cover.

• EU cash corn prices are soaring on the lack of old crop supply. It appears that EU corn supplies have all but run out. Feeders/starch manufacturers are searching for any old crop cash corn available. We understand that cash corn prices are soaring with bids rising to $8-8.50/bu equivalent to end the week. The EU corn end user is extremely short bought with 3.5 months remaining before the new harvest.

• Others mention that the hunt is on for June/July corn and that end users simply cannot find any meaningful volume. Prices are likely to keep rising while the initial EU wheat crop will find massive demand for the EU feed industry. The EU cannot import US or Argentine corn with the Ukraine sold out. The EU corn shortage has no supply solution as of today.

• Argentina is reporting that seven ships carrying grain have been stranded by low Parana River water levels. A loading strike caused boats to be caught with too much supply on board as river levels declined amid a lack of water flow from Brazil. Most of the boats are loaded with soymeal heading to Asian destinations. Port workers are planning another strike next week to protest the lack of Covid vaccines for essential workers. The stranded vessels will try to offload some of the cargo to refloat. The Parana River level is forecast to decline to near record lows over the next two weeks and the cost of load out will be rising via top off costs downriver. The Brazilian drought has reduced the flow into the Parana River and logistical concern is likely to build without the arrival of S Brazilian and Northern Argentina rains.

• The midday GFS weather forecast targets Iowa/Missouri with heavy rainfall into May 30 with totals of 1-3.50″. The Northern Plains and the Central Canadian Prairies will be short-changed with rainfall of 0.25-1.25″A. high-pressure ridge holds across the South-Central US with a deep trough of low pressure just west of Hudson’s Bay. This trough maintains a flow of showers/storms through the Midwest. There is no indication of any extreme heat/dryness through June 5 . Any high-pressure ridging stays well to the south of key corn/soybean and Northern Plains spring wheat areas. Temperatures warm to the mid 70′s/upper 80′s.

• Chicago rallies and breaks just cannot be sustained amid favourable Central US weather (bearish) and tightening US old crop corn and soybean supplies (bullish). The funds are shedding length on rallies while end users buy breaks worried about adverse summer weather. The rains across the N Plains have been disappointing and drought worries are likely to persist into summer. Amid this week’s massive Chinese purchases of US corn, we doubt that Dec corn can fall too far below $4.40 or November soybeans much below $13.50. Buy breaks.

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