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Grain Comments: 04-04-2024

Good morning.

Markets have been choppy/sideways in the overnight trade Thursday morning. Fundamental news remains mostly limited, as traders are watching North American weather forecasts for signs of when Spring planting may begin. Next week’s April WASDE report does not look to offer a ton of market shocks, as South American production is being fine-tuned, and the USDA doesn’t flip the page to 2024/25 until May. Geopolitical tensions in the Middle East and Russia/Ukraine have likely given grain markets some measure of a floor, but long-term price direction is entirely dependent on US Spring weather and acres. Corn and soybean futures are both trading either side of unchanged, and the Chicago wheat market is down 1-2 cents. Products are mixed, soybean meal is up around $1/ton, and soybean oil is unchanged to 5 points lower. Outside markets are mixed also, crude oil futures are trading either side of unchanged, the Dow Jones index is up 100 points, and the US$ index is down 15 points.

This morning’s weekly export sales report is expected to show corn sales for the week ended March 28th in a range of 800k – 1.4 mil mt’s. Soybean sales are seen at 200k – 600k mt’s, and wheat sales are seen in a range of (100k) – 400k mt’s.

The export story looks to be similar to recent weeks, with decent corn sales expected, while soybean and wheat sales are expected to remain seasonally slow.

A story early last night said Russia had again held up grain exports from one of its biggest domestic traders, Aston, in an incident similar to that seen with TR Rif last week.

This morning however, there is some confusion as spokespeople from Aston have said by email that its export program is continuing “without changes.”

Brazilian agribusiness company Anec said they see soy exports out of the country in the month of April reaching 10.65 mmt’s, which would be down nearly 3.4 mmt’s from April of 2023.

The same group sees soybean meal exports for April at 2.31 mmt’s vs 1.74 mmt’s last year. Corn exports are seen at 25k mt’s vs 166,552 mt’s last year, which is a nearly an 85% reduction.

Malaysian palm oil stocks are seen at their lowest levels in nearly 8 months according to a survey of analysts. Stocks were down 8.3% in March m/m and are down nearly 30% since last Fall. Futures prices in the country are not surprisingly near 12-month highs.

Fed Chair Powell did not offer financial markets a whole lot of new rhetoric on Wednesday. “Given the strength of the economy and progress on inflation so far, we have time to let the incoming data guide our decisions on policy,” said Powell yesterday.

Economists see today’s jobless claims coming in slightly higher than last week at 214,000. This would be within the average range of the last six months and is otherwise the only notable data ahead of Friday’s all-important non-farm payrolls report.

The US Midwest forecast is slightly dryer into next week in the overnight run, with moisture seen further to the South/Southeast. Scattered storms/showers linger in the Ohio River Valley Thursday, as the low-pressure system makes its way out to the East Coast.

Temps are still seen turning milder next week and beyond the middle of April, as a high-pressure ridge is expected to anchor above the Central US. Long-range forecasts do not show much change in the last 24 hours.

Forecast for South America remains generally non-threatening. Nearly all of the safrinha corn growing area in Brazil is expected to see some sort of precipitation over the next 10 days, with most areas having received good rains already in the last week.

Heaviest rainfall totals are seen in Southern Brazil, into Paraguay and Northern Argentina over the next 10 days. Extreme heat remains non-existent for the next 10 days. Argentina is mostly dry, but this is not a concern right now.

Have a great day.

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