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Grain Comments: 04-05-2024

Good morning.

Grain markets are higher in the overnight trade to end the week, led by Chicago wheat futures, which have gained some 10-15 cents to the upside since shortly after 5am central time. Corn futures are getting pulled along, while the soybean market trades near unchanged. Traders will have an eye on this morning’s non-farm payrolls report, as today is likely to be a macro/fund related day of trade. Next Thursday’s WASDE report looks to be the next market mover, with daily weather forecasts the focus of the trade in the meantime. Corn futures are trading 2-3 cents higher, soybean futures are trading 1-2 cents higher, and the Chicago wheat market is up 10-15 cents. Products are mixed, soybean meal is down around 50 cents/ton, while soybean oil is up 20-30 points. Outside markets are green, crude oil futures are trading 20-30 cents/bbl higher, the Dow Jones index is up 100 points, and the US$ index is up 10 points.

Data from the Brazilian Trade Ministry shows corn exports in the month of March were down nearly 68% y/y. Soybean exports for the month were seen down 4.6%, and soybean meal exports were down 3.4%. Of note, cotton exports were seen 233.5%(!) higher than March 2023.

Census export data released by the US Census Bureau Thursday showed corn exports for February at 211 mil bu, soybean exports at 193 mil bu, and wheat exports at 68 mil bu.

Corn exports are up 64% vs Feb 2023, and are around 23% higher than weekly inspection data shows. Soybean exports are down 2% vs Feb 2023, and are around 33% higher than weekly inspection data shows.

According to the UN’s FAO (Food & Ag Organization) global food prices rose in March for the first time in seven months, led by hikes in veg oil, dairy, and meat prices.

Vegetable oil prices were up nearly 8% m/m, while grain prices were down 2.6%. The index as a whole was up 1.1% in March from its revised February reading.

Barge shipments down the Mississippi River were nearly 22% lower than last week for the week ended March 30th, coming in at 659k tons. Corn shipments of 374k tons were down 10%, while soybean shipments of 226k tons were down 35%.

According to yesterday’s US drought monitor update, approximately 24% of US corn area is in drought, while approximately 22% of soybean area is in drought.

Notably still some 70.6% of the state of Iowa remains in D1-D4 drought, up slightly from last week’s 71.3% reading. Otherwise, driest areas outside of Iowa continue to be seen in the Southwest, where little to no rain is forecast for the next two weeks.

WTI crude oil futures again traded to new highs on Thursday, as tensions in the Middle East continue to increase. An Israeli airstrike on the Iranian embassy in Syria earlier this week has put traders on edge over what form of retaliation might occur.

Major stock indexes all closed more than a percent lower on Thursday; blame was given to comments from Minneapolis Fed Reserve Bank President Neel Kashkari, who stated that if inflation continues to stall this year, no rate cuts may be seen by year-end.

This morning’s non-farm payrolls report is expected to show an increase of around 200k jobs in March, compared with a 275k job increase in February. The unemployment rate is seen unchanged at 3.9%, which would be the 26th straight month of a sub-4% reading.

24-hr precipitation maps show additional moisture falling in the Ohio River Valley and the far Northeast yesterday and last night. Models continue to advertise two additional systems making their way from West to East next week, with the second positioned further to the South.

Two-week forecasts continue to show a broad ridge pattern moving in beyond the middle of April, which should open widespread planting windows through the corn belt. Somewhere between April 10th and April 15th is when this change is expected.

South American weather forecasts remain little changed from yesterday. Good rains seen for most of Brazil, with heavy rains seen in the South into Paraguay and Argentina. No extreme heat is advertised.

Have a great day!


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