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Grain Comments: 04-16-2024

Good morning.

Another quiet night of trade so far in the ag markets to kick off Tuesday. Corn futures have mustered all of a two-cent trading range, while soybeans and Chicago wheat have both been up 4 or 5 to down 4 or 5. Planters are beginning to roll across the Midwest, with farmers anxious to get the 2024 season off to a fast start. Corn futures are trading a penny lower, soybean futures are trading 2-3 cents lower, and the Chicago wheat market is also down 2-3 cents. Products are mixed, soybean meal is up $1-2/ton, and soybean oil is down around 50 points. New lows again for the move this morning in bean oil. Outside markets are mixed also, crude oil futures are trading 40-50 cents/bbl lower, the Dow Jones index is up 200 points, and the US$ index is down 5 points. Of note on the stocks, the S&P and NASDAQ are both nearly unchanged.

Monday afternoon’s planting progress and winter wheat condition reports did not offer a lot of shock to the markets. Corn plantings in the US were seen at 6% complete, which was below the average trade guess but 1% ahead of the 5-year average pace.

Soybean seeding was 3% complete; this matched trade expectations and is equal to this week last year. Five-year average pace is 1%, so we are ahead of that also.

Winter wheat conditions were down 1% in the good/excellent category to 55%, in line with expectations. Spring wheat was seen at 7% planted, up 4% from last week and 1% ahead of the five-year average.

At a meeting in Washington on Monday, USDA Secretary Tom Vilsack said he is hopeful the revised tax credit model for corn ethanol (GREET) and other raw materials used to make SAF would be announced by the end of April. An announcement was originally expected on March 1, but has been delayed.

According to China’s National Bureau of Statistics, pork output in the country for Jan-March fell for the first time in the last five years as farmers slaughtered fewer pigs to support a recovery in prices.

Also out of China, Q1 GDP at 5.3% was well above economists’ expectations for a 4.6% reading, and also above the 5.2% increase from the previous quarter. This likely reason for overnight strength in the Dow.

The US$ index again made new highs overnight, as traders and investors continue to see the odds of a June rate cut slipping by the wayside. Fed Chair Powell, amongst others, will take part in a Q&A on Tuesday.

No new news out of the Middle East over night; traders continue to have heightened alert for any sign of a retaliatory attack out of Israel following Iran’s weekend drone/missile barrage. The US and EU have condemned such an attack, but Israel has vowed retaliation.

Weather forecasts are seen mostly unchanged. A strong storm system is seen moving through the Midwest Tuesday into Wednesday, with another shot at smaller storms seen on Thursday. Beyond here, a drier pattern emerges for the Eastern US into the first part of May.

Cool air is still seen blanketing most of the Eastern US into this weekend, before a warmer pattern is seen into the end of April. Long range forecasts continue to see a pattern shift to more ridging vs the troughs have been moving through the country the last few weeks.

Again, there will be not a lot of change for South America over the next 10 days. A pocket in East/Central Brazil will be dry, but otherwise most growing areas look to continue to receive monsoonal rains over the next week. This dry area has also trended slightly warmer in the last 24 hours, which needs monitoring.

Have a great day!

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