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Grain Comments: 04-10-2024

Good morning.

Another turnaround on Wednesday this week, as markets are recovering yesterday’s losses. Today looks to be a mostly macro day ahead of tomorrow’s government data from both the USDA and Conab. This morning’s PCI report is expected to be a market mover for the US$ index, which in turn will have an effect on grain prices. Corn futures are trading 1-2 cents higher, soybean futures are trading a penny higher, and the Chicago wheat market is trading 5-6 cents higher. Products are mixed, soybean meal is down around $1/ton, and soybean oil is up 30-40 points. Outside markets are mostly higher, crude oil futures are trading 50-60 cents/bbl higher, the Dow Jones index is up 75 points, and the US$ index is down 10 points.

Today’s weekly ethanol production report is expected to show daily production in a range of 1.058-1.083 mil bbls. Stocks are seen between 26.2-26.816 mil bbls.

If the high end of estimates are realized, production would be the highest since mid-February, while stocks would be the highest since April of 2020.

Traders see Conab making slight upward adjustments to production estimates in Thursday’s report; corn production is seen at 114.45 mmt’s vs 112.75 mmt’s in March, while soybean production is seen at 147.48 mmt’s vs 146.86 in March.

Traders see the total corn area also coming in slightly higher than last month at 20.62 mil ha’s. This would be up from 20.361 mil ha’s in their March estimate, and amid rumors of expanded area due to soybeans being harvested early or abandoned, will likely be the most watched for data point.

The EU parliament has agreed to extend the suspension of import duties and quotas on Ukrainian ag exports to the EU until June 5, 2025. The agreement includes safeguard measures, allowing for the re-imposition of tariffs if imports exceed specified levels.

Economists see this morning’s inflation data coming in at 3.4%, up from 3.2% last month. Core inflation is seen coming in slightly higher than last month at 3.8%.

Economists will also be looking for any signs of a shift in tone out of today’s FOMC minutes, which will be released at 1pm central time. Other financial news includes a rate decision from the Bank of Canada, ahead of tomorrow’s decision by the ECB.

Weather forecasts have moved moisture farther East in the overnight runs in the two-week period. Good rains are however seen for most of the Eastern corn belt over the next 10 days. The EU model shows 10-day precipitation of 0.5″ to 3″ for most everywhere East of the Mississippi.

The South/Southeast continues to get hit with rain Wednesday into Thursday, as 24-hour rainfall has surpassed 6 inches in parts of LA and MS. Strong storms look to exit the East Coast by Thursday night/Friday morning.

Temps are still seen returning to above average by this weekend and remaining there for most of next week. Longer term models have seen disagreement in recent days on cooler air returning in the second half of April, which will need monitoring.

South American forecasts have moved rains slightly further South overnight into Argentina and Southern Brazil but are otherwise unchanged and non-threatening. What areas that had been shortchanged on moisture look to be filled in in the next 10 days.

Have a great day!

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