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Grain Comments: 04-02-2024

Good morning.

Turn-around Tuesday at the CBOT so far in the overnight session. Crude oil futures have jumped out to new highs again this morning on ongoing tensions in both the Middle East, as well as Russia. A Ukrainian drone attack hit Russia’s third largest oil refinery overnight, some 1,300km from the frontlines. Otherwise, ag markets have seen small ranges and light volume so far on Tuesday. Corn futures are unchanged to a half cent higher, soybean futures are up 2-3 cents, and the Chicago wheat market is down 2-3 cents. Products are mixed, soybean meal is down $1-2/ton, and soybean oil is up 60-70 points. Outside markets are also mixed, crude oil futures are trading $1.20-1.50/bbl higher, the Dow Jones index is down 225 points, and the US$ index is down 15 points.

Yesterday’s first crop progress report of the year showed winter wheat good/excellent conditions at 56%. Conditions were 50% g/ex last November, and this is the best initial spring rating for winter wheat in four years.

Notable improvements were seen from last Fall in Kansas (+16% g/ex), Nebraska (+16% g/ex), and Oklahoma (+20% g/ex). The biggest decreases were seen in Idaho (-16% g/ex), and Ohio (-13% g/ex).

Also of note, corn planting was seen 2% complete, vs 1% on average and 2% this week last year. Corn planting in Texas was 57% complete, compared to 56% last year.

Yesterday afternoon’s USDA Fats and Oils/Grain Crushing reports showed Feb soybean crush at 194 mil bu. This was down 0.5% from Jan, but up 9.6% from Feb 2023.

Report also showed corn grind for ethanol at 441.5 mil bu in Feb. This was up 0.1% from Jan, and up 10.7% from Feb 2023.

Brazilian consultancy AgRural estimated Brazil soybean harvest as of March 28th at 74% complete. This compares with 69% last week, and 76% last year.

Cattle markets were sharply lower on Monday following news of a human contracting the bird flu that has gotten into dairy cattle. No new updates as of this morning, as the USDA says the situation is “rapidly evolving.”

Along with StoneX yesterday, the USDA ag attaché in Brazil trimmed their total corn production forecast for the country to 122 mmt’s, citing adverse weather caused by El Niño.

Financial markets Tuesday will see direction from the JOLTs Labor survey, following Monday’s unexpected rise in factory spending. From a big-picture standpoint, the market’s main focus this week will be Friday’s non-farm payrolls report.

Not much change overnight for South American weather; Central Brazil dries out over the next 10 days, while rainfall moves further South into Argentina. Temps are seen mostly average.

72-hour precipitation totals have approached the 4″ mark in parts of the Ohio River Valley, with areas from Missouri to Pennsylvania receiving anywhere from 0.5-4″.

Rainfall continues Tuesday into Wednesday, before a temperature drop causes a wintry mix of snow and ice, with parts of the upper Midwest expected to receive 6+” of snow. Another system is seen bringing more rainfall early next week, as temps will rise to above normal.

Long range forecasts are mostly unchanged, and open planting windows are seen beyond the first 10 days of April.

Have a great day!

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