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Grain Comments: 04-09-2024

Good morning.

Ag markets are lower to start Tuesday, led to the downside by the wheat markets. Crop conditions for the winter wheat crop that are significantly improved from last year have pressured futures early this morning. Otherwise, traders await the release of the April WASDE report on Thursday, as well as the release of Conab’s April S&D report. Corn futures are trading 1-2 cents lower, soybean futures are trading 3-4 cents lower, and the Chicago wheat market is down 6-7 cents. Products are mixed in a reversal Monday, soybean meal is trading $2-3/ton lower, and soybean oil is trading 5 points higher. Outside markets are quiet, crude oil futures are trading either side of unchanged, the Dow Jones index is up 30 points, and the US$ index is down 5 points. Of note, gold and silver futures both made new contract highs overnight.

Monday afternoon’s crop progress report did not show anything out of the ordinary, with corn planting still slow to get rolling. The US is now 3% planted vs 2% last week and 2% on average. Texas, unsurprisingly, is the furthest state along at 59% planted.

Winter wheat conditions continue to run well above last year, with 56% of the crop being rated in the good/excellent category last week. 32% of the crop is seen fair, with just 12% of the crop rated poor or very poor.

AgRural announced Brazil’s soybean harvest had reached 78% of last Thursday, which is up 4% on the week, but still behind last year’s 82%.

For Thursday’s report, traders see corn ending stocks for 2023/24 coming in just slightly below last month at 2.102 bil bu. Soybean ending stocks are seen at 317 mil bu, vs 315 in March.

World corn ending stocks are seen at 316.72 mmt’s vs 319.63 last month, and world soybean ending stocks are seen at 113.71 mmt’s, compared to 114.27 in March.

And lastly, USDA sees corn production out of Brazil at 121.75 mmt’s vs 124 last month and sees corn production out of Argentina at 55.6 mmt’s, vs 56 last month. Soybean production for Brazil is seen at 151.68 mmt’s vs 155, and Argentina is seen at 50.48 mmt’s vs 50 last month.

Financial markets look to be relatively quiet for another day, awaiting data from Wednesday morning’s CPI report. This, along with a rate decision from the ECB on Thursday, will be the main data points this week.

According to a report from an EU climate monitoring service, March was the world’s warmest on record, extending that streak to now 10 months. The 12-month period ending in March was also the world’s hottest 12 month span on record.

Turkey announced overnight it would be restricting exports of a wide range of products to Israel until a ceasefire is reached in Gaza. Of note, the list of restricted exports included steel and jet fuel.

Both the GFS and the EU weather models were slightly wetter for the US Midwest in the two-week period but were otherwise unchanged from yesterday. Strong storms make their way through the Southeast and towards the East coast into the end of the week.

Areas near the Delta region and Eastern Texas have received upwards of 1-3″ of rain in the last 12 hours, with some local areas seeing totals closer to 5″.

Temps are seen again warming to above average by this weekend and staying there into next week. Models continue to be in good agreement on a coming window of warm/dry weather for most of the corn belt beyond the middle of April.

South America continues to see good rains and normal temps for most of Brazil and Argentina over the next 10 days, with no changes seen to the overnight model runs.

Have a great day.

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