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Grain Comments: 04-19-2024

Good morning.

Geopolitical happenings have again taken center stage to wrap up the week, as an attack by Israel inside of Iran overnight sent markets sharply higher to start the night session. Most all markets have traded well off their highs since, as details on the attack are scarce. Today is likely a short covering day in the grains, as fund managers take a more risk-averse approach going into the weekend. Corn futures are trading 2-3 cents higher and are 2-3 cents off the highs, soybean futures are trading 2-4 cents higher and are roughly 6-7 cents off the highs, and the Chicago wheat market is up 6-7 cents but is some 15 cents off its highs. Products are mixed, soybean meal is up $2-3/ton, and soybean oil is down 30-40 points. Soybean oil again made new lows overnight. Outside markets are mixed, crude oil futures are down around 60 cents/bbl, after trading nearly $4 higher last night, the Dow Jones index is down 50 points, and the US$ index is down 10 points. Financial markets have not seen a lot of reaction to the Israel/Iran news.

Details of an Israeli drone strike in the Iranian city of Isfahan are scarce this morning; Iran has so far downplayed the incident and said the attack “failed.”

It is worth noting that preliminary findings show no damage to either oil refineries or nuclear plants, which is likely what sent markets back off the highs. Iran also said they would not be retaliating.

This afternoon’s cattle on feed report for March is expected to show cattle on feed as of April 1 at 102% of last year, while March placements are seen at 93% of a year ago, and March marketings are seen at 88% of a year ago.

The IGC (International Grains Council) lowered its estimate of world 2024/25 corn production to 1226 mmt’s, down 7 mmt’s from its last estimate. Cuts were primarily seen in the US.

The Buenos Aires Grains exchange, in their weekly crop progress update, estimated soybean harvest at 13.9% complete, and corn harvest at 17.2% complete. Both are well behind the five-year averages.

Soybean g/ex condition was seen at 30% vs 31% last week, normal was seen unchanged at 47%, and p/vp was up 1% to 23%. For corn, things stabilized a bit compared to recent week’s slides; g/ex was up 1% to 20%, normal was down 1% to 45%, and p/vp was unchanged at 36%. The group made no changes to production estimates this week for either corn or soybeans.

In a notice yesterday, the Panama Canal Authority said starting May 16th daily transits would be raised by 4 to 31. This comes as drought conditions begin to ease in one of the world’s main passageways for commodities. The authority has been quoted recently as saying they anticipate operations returning fully to normal by the start of 2025.

Barge shipments down the Mississippi River were seen at 500k tons in the week ending April 13, up from 424k in the previous week. Corn shipments were up 1.3%, while soybean shipments were down 4%.

Precipitation over the last 24 hours was seen favoring a majority of Missouri and Illinois, while parts of Southern Indiana into Kentucky also received good moisture. Totals were seen in a range of 0.1-2″ for the most part, with some locally heavier amounts.

Models are in better agreement overnight on next week’s dryness for a majority of the corn belt. Moisture will be limited to the S/SE. The GFS sees more widespread moisture in a week two period, while the EU sees more local precipitation, but heavier amounts.

A good majority of the Northern corn belt into the Plains will see frost risk this weekend as overnight lows dip into the 20’s Saturday/Sunday. Cooler air remains in place for most of next week, before a ridging pattern brings more mild air back to the Eastern US.

South America trended warmer for a majority of South/Central Brazil overnight, with still little to no moisture seen in this area over the next 10 days. As mentioned previously, safrinha corn areas that were shortchanged on recent rains will likely see stress in the coming days.

Have a great weekend!

 

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