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Grain Comments: 04-01-2024

Good morning.

Happy April Fool’s Day and first day of April! Markets at the CBOT are mixed coming out of the long Easter Holiday weekend. Parts of the world remain on holiday today, which likely curtails trading volume to some extent. Thursday’s report confirmed bearish stocks scenarios, which had been mostly priced in, while leaving the door open for surprises this summer on the acreage side by trimming a combined total of 6.3 mil principal crop acres from 2023. The million-dollar question is where did all these acres go? Solar? CRP? Or if early planting windows open up in April, do they show up as a bearish anchor in June/July? Corn futures are trading 1-3 cents lower, soybean futures are trading 3-5 cents higher, and the Chicago wheat market is trading 6-7 cents lower. Products are mixed, soybean meal is down around $1/ton, while soybean oil is trading 60-70 points higher. Outside markets are mixed, crude oil futures are trading 20 cents/bbl lower, the Dow Jones index is up 100 points, and the US$ index is up 5 points.

Also, of note from Thursday, the report showed on-farm corn stocks as of March 1 represented nearly 61% of the total stocks; this is the largest percentage of on-farm stocks in the last 15 years.

Friday’s COT report showed for the week ended March 26th, managed money were buyers of 13,559 contracts of soybean futures/options, while being sellers of 8,742 contracts of corn, and 11,532 contracts of wheat.

Managed money is now seen short 251,730 combined contracts of corn f/o’s, short 134,780 combined contracts of soybean f/o’s, and short 92,102 combined contracts of wheat f/o’s.

Last week’s quarterly hogs and pigs report, out Thursday afternoon, showed March 1 hog inventory at 74.6 million head; this was 1% higher than last March, but down 2% from December’s reading.

Breeding inventory at 6.02 mil was down 2% from 2023, while marketing hog inventory at 68.6 mil head was up 1%.

Lastly on catch-up items from last week, crop conditions in Argentina showed slight deterioration in their weekly update; g/ex conditions for soybeans decreased 2% to 29%, normal was down 3% to 50%, and p/vp was up 5% to 21%.

Corn saw a similar week; g/ex was down 2% to 22%, normal was seen at 53%, also down 2%, and p/vp was up 4% to 25%.

Also, of note on weekly crop conditions, US crop conditions for the year will begin this afternoon with winter wheat ratings, as well as planting progress for corn. Soybean planting progress updates will begin in the coming weeks.

The USDA’s February Fats and Oils report will be released this afternoon; the report is expected to show Feb soybean crush at 196.7 mil bu, which would be up 11.2% from 2023. Oil stocks are seen at 2.255 bil lbs., down 4.6% from last year.

Corn used for ethanol is seen increasing to 440.5 mil bu, which would be up 10.5% from last year.

Palm oil exports out of Malaysia for the month of March totaled 1.333 mil tons, which was up 20.5% vs February, and the largest monthly total since December of last year.

Ukraine’s ag ministry announced 476,700 ha’s of spring crops have been planted. This compares to 500k ha’s planted as of March 30th last year.

Also out of Ukraine, grain exports are down 7.5% compared to 2023. The marketing year began on July 1. A total of 34.6 mil tons of grain have been exported, including 13.7 mil tons of wheat and 18.6 mil tons of corn.

It was announced over the weekend that avian influenza had been discovered in dairy herds in Michigan and Idaho, indicating the virus is spreading. This is a situation that will continue to need monitoring.

For the week ended March 23rd, barge shipments down the Mississippi River were up nearly 82% from the previous week at 844k tons. Corn shipments 414k tons were up 66.3%, while soybean shipments of 347k tons were up 102.9%.

While the grain markets were closed Friday, crude oil futures closed at their highest levels since last September and were up nearly $2/bbl.

Financial markets saw inflation data out Friday that was nothing out of the ordinary; core PCE came in 0.3% higher in February, which was slower than January and in-line with economist’s expectations.

Fed Chair Powell commented later Friday that the readings were “pretty much in line with our expectations.” He also added it wouldn’t be appropriate to lower rates until officials are sure inflation is in check.

South American weather over the weekend showed an improved chance at rainfall for Argentina/Southern Brazil over the next 10-days. Conditions dry out in the North following good rains over the last week-10 days.

The US Midwest saw good rains of 1-3″ over the weekend across parts of Northern Illinois, Indiana and Ohio. Forecasts also show these areas as the most likely to receive additional moisture this week, with a slow-moving system expected to roll through by Friday.

Temps are seen below normal for most of the Midwest this week, before warming to more mild levels beyond the first 10 days of April. Longer-range forecasts continue to remain generally non-threatening for early Spring planting.

Have a great day.

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