New-crop corn values have finally picked up some support with the Midwest weather outlook turning sharply towards the bullish side after what now looks like a “false start” for early corn planting; old-crop/new-crop spreads have subsequently pulled back a bit as well, after a month-plus rally. There remains plenty of time to plant, even with colder outlooks now through the month of April. Soybeans and meal continue to rally with the 2022/23 Argentine soy campaign looking like a full-fledged disaster. The wheat market seems a bit tired of the Black Sea grain deal rhetoric, but plenty of issues remain here in the U.S. with the winter crop in rough shape and spring wheat planting prospects off to a slow start.
March NOPA soybean crush is expected to come in at 183.4 million bushels this morning, up from 165.4 mbu in February and 182.5 mbu last March (a record for the month). Estimates range from 180.7-188.5 million bushels.
Rain and snow are exiting the eastern and northeastern Midwest yet this morning after a widespread weekend event as expected, affecting all the but the far NW/SW belt and northern/southern Plains. Rain will be back already in the northern Midwest on Wednesday, filling in through the rest of the belt Thursday/Friday for a similar coverage map to the weekend system. 6–10-day maps look drier with 11–15-day maps more varied, though some rains will potentially be moving in later in that period in the west. Temperatures are set firmly below-normal right up through the remainder of the month of April.
Rains in central Brazil this week will improve moisture supplies for safrinha corn areas, but some northeastern dryness concerns remain as rains dry up into the 6–10-day time frame.
Trade is now focusing on the next big data release from the USDA. This will be the May WASDE, which is one of the most watched of the year. This is because the May release contains the first official look at new crop balance sheets. We have seen several estimates on new crop balance sheets already, mainly the USDA’s Ag Outlook Forum and the Baseline data. May balance sheets will use the prospective plantings numbers and trend yields for production, and while these will be altered as the year progresses, they tend to receive considerable attention. We will also see the USDA release demand numbers for the 2023/24 marketing year, and these can be just as influential for trade as the production side. Heading into this report more attention will be paid to soybean balance sheets as these are expected to remain tight for at least another year. Most balance sheets estimates see soybean reserves holding at a rationing level even if the US crop is slightly larger than last year. At the present time US soybean ending stocks could increase 50% and still not be overly negative for the complex. The same thoughts are starting to develop in the wheat market. Corn is less concerning as trade is forecasting a record crop this year and steady demand. Soybeans led the grains overnight as futures broke through technical resistance. Today’s trade will again be driven by US planting reports and South American crop reports, along with any export interest we may see.
Have a great day!