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Grain Comments: 04-03-2024

Good morning.

Turn around Wednesday this week, as markets are tepidly attempting to scratch back some of yesterday’s losses. Trade has been two-sided so far with soybean and Chicago wheat futures making new lows for the week in the overnight session. As weather forecasts are generally favorable, the market needs some sort of spark to start a rally. Corn futures are trading 2-3 cents higher, soybean futures are trading 2-3 cents higher, and the Chicago wheat market is up 6-7 cents. Products are mixed, soybean meal is around $1/ton lower, and soybean oil is trading 50 points higher. Outside markets are also mixed, crude oil futures are trading 90 cents/bbl higher, the Dow Jones index is unchanged, and the US$ index is down 10 points.

Crude oil futures again made new highs overnight and are trading their highest level since October of last year. Traders are anxious over new developments with Israel/Iran, as well as continued drone attacks by Ukraine on Russian oil refineries.

Today’s weekly ethanol production/stocks report is expected to show daily production for the week ended March 29th in a range of 1.037-1.060 mil bpd. Stocks are seen in a range of 25.942-26.0 mil bbls.

The latest update to the avian influenza (bird flu) situation includes birds at a Texas egg production facility being infected with the disease. Cal-Maine Foods Inc., the largest egg producer in the US, has culled around 3.6% of its flock as of this morning.

The company said some 1.6 million laying hens and nearly 350,000 pullets were destroyed. Production at the Parmer County, TX plant has ceased temporarily, and shares of the company’s stock were down around 6%.

Officials at the Panama Canal said they expect it to be the end of this year before operations return to normal. The return of La Niña will bring rain to the area by the end of April, providing relief following record-setting drought in 2023.

Construction of an 80-mil gallon/year renewable diesel plant in Hastings, Nebraska has been delayed until 2026 according to officials familiar with the project. Construction began in 2022 and was supposed to be completed this summer.

The joint venture between The Love’s Family of Companies and Cargill will be “the only entity of its kind to both manufacture and distribute renewable diesel fuel all the way to the retail pump,” according to Cargill senior communications manager Chuck Miller.

In other news, Taiwan experienced its strongest earthquake in nearly 25 years overnight. As it pertains to the markets, Taiwan is a major producer of advanced chips for computers and cell phones, which could cause a supply snarl for the technology sector.

Economists Wednesday will have their attention turned to Fed Chair Jerome Powell’s latest comments, due out from a press conference this afternoon. This will be his first remark since data this week caused trepidation on whether a June rate cut will occur.

Rainfall continued in the Northeastern corn belt overnight, with some areas now showing totals of nearly 6″ in the last 72 hours. The heaviest totals are further East near Pennsylvania.

The atmosphere looks to stay active into the weekend, with several systems seen bringing moisture to the Midwest in the next 10 days. Maps favor the Southeast as the likely wettest area of the forecast.

Temps are still seen improving to more mild levels beyond April the 10th but will be cooler by the first part of next week.

Overnight forecasts are slightly wetter for North/Central Brazil in the 10-day period but are otherwise mostly unchanged. Extreme heat is absent for both Brazil and Argentina over the next week.

Have a great day!

 

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