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Grain Comments: 04-15-2024


Good morning.

Ag markets are slightly lower to start out the third week of April. Overnight trade has been mostly quiet, with both corn and soybean futures having inside days so far early this morning. Geopolitical happenings look to dominate the headlines on Monday, before attention quickly turns to this afternoon’s planting progress report and the coming two weeks of weather. Fundamentals remain mostly the same, as the April WASDE has come and gone; market focus now becomes US planting progress in the next 4-5 weeks, as the South American crops are close to being made. Corn futures are trading 2-3 cents lower, soybean futures are trading 3-4 cents lower, and the Chicago wheat market is down 7-8 cents. Products are mixed, soybean meal is down $3-4/ton, and soybean oil is up 20-30 points. Outside markets are mixed, crude oil futures are trading 60-70 cents/bbl lower, the Dow Jones index is up 200 points, and the US$ index is down 15 points. The $ index also has an inside day going early following last week’s big rally day on Friday.

Biggest headline from the weekend was that Iran launched a large-scale drone and missile attack against Israel, in retaliation for a raid on the Iranian consulate in Syria.

Reports say 98-99% of the drones/missiles were intercepted, with the Iranian side calling the matter “concluded.” President Biden has told Israel the US will not support a counterattack, with European countries echoing the same sentiment. Crude oil futures have not had a huge reaction to the news so far on Monday.

Friday afternoon’s COT report showed managed money traders were sellers of 3,998 contracts of corn futures/options, and sellers of 1,054 contracts of soybean futures/options in the week ended April 9th. Managed money is now seen short 263,554 contracts of corn, and short 139,310 contracts of soybeans.

Brazilian agribusiness consultancy Safras & Mercado updated production estimates for Brazilian corn and soybeans late last week; the group now sees soybean production at 151.25 mmt’s, up 2.65 mmt’s from their previous estimate.

Same group sees Brazil corn production at 126.13 mmt’s, up 0.27 mmt’s from their previous estimate. Both of these estimates are above Conab, while the USDA is still higher on soybean production for Brazil.

As of April 8th, 64% of the French soft wheat crop was rated g/ex, down from 65% last week and 94% in the same week last year. March was the fifth wettest month since 1958 for the country.

This afternoon’s NOPA soybean crush report is expected to show March crush at 197.787 mil bu’s, which would be more than any month on record. This would also be up 6.2% from February, and up 6.4% from March of 2023.

Soy oil stocks are seen at 1.792 bil lbs., which would be up 6% from February but down 3.2% from March of 2023.

As of Friday, Ukraine’s grain exports for the marketing year are down 4% from the same period last year according to the Ag Ministry. The total includes roughly 14.7 mmt’s of wheat (+9% y/y), and roughly 20.5 mmt’s of corn (-11% y/y).

Also, of note out of Ukraine, farmers have planted roughly 1.26 mil ha’s of grain crops for the coming season, nearly double this point in the season last year due to warmer than average weather.

Nutrien Ltd., a Canadian fertilizer producer, has announced it is planning to sell its retail operations in Chile, Argentina and Uruguay in order to better focus on Brazil and other markets. Argentina’s political/currency situation was cited as a reason for the development.

US federally inspected pork production was up 2.6% on the week ended April 13th to 535 mil lbs. Beef production was down 1.4% to 510 mil lbs.

The EUR/USD has widened out to a five-month low recently on ideas the US Fed might keep interest rates elevated until later in the year, due to stubbornly sticky inflation readings. Comments of late from the two sides have seemed to indicate a divergence in policies.

The EU weather model has trended wetter over the weekend for the Midwest, with multiple chances of storms in the next 5 days. The wettest areas look to be the South/Southeast, with the Dakota’s/Minnesota also expected to see good moisture. Notably, neither model sees much moisture for the Southwest in the next 10 days.

48-hour precipitation maps show most of the country was dry over the weekend, with the exceptions being the West Coast and the Northeast.

Forecasts have also added some cooler air returning to the country by the middle of this week, with temps seen slightly below average into this weekend. Temps are seen returning to a warmer bias by the end of the month.

Not a lot of change for South America over the weekend. This week is expected to bring good moisture to Southern Brazil/Argentina, while Central/Eastern Brazil dry down slightly. Extreme heat is not forecast for any of the growing regions in the next week.

Have a great day

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