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Grain Comments: 04-20-2023
Good morning:
Crude oil continues its steady decline over the past week and that has the soy complex leading losses (and volume) in the grains; the trade seems confident enough with the resumption of Black Sea exports as well as the ability of the U.S. farmer to get corn and soybeans in in a timely fashion.
Tomorrow afternoon’s USDA Cattle on Feed Report is expected to show all U.S. cattle on feed as of April 1 at 11.5 million head, or 95.0% of last year; March placements are seen at 94.8% of LY with marketings at 99.1% of LY.
Heavy rains fell mostly in MN and IA yesterday with action stretching further south this morning and lingering in the SE belt through Friday; more precipitation is on the way next week for the 6–10-day time frame, with drier conditions still forecasted for the 11-15 day. Temps remain cool up through early May.
Trade will again be heavily interested in today’s weekly export sales volumes, especially for corn. The string of daily sales on corn has ended but we did see some flash sales over the past week. Total sales of corn have improved but the cumulative total is still down 8% from estimates. While this is a considerable improvement from earlier in the marketing year, until we see sales top expectations market reaction will be muted. We did see hopes of elevated corn demand from the low crop estimates in Argentina but the larger crop in Brazil is starting to offset these concerns. We are now starting to see doubts that Brazil will be able to satisfy their growing demand this year, even with record corn production. While that may bring the US some export demand it will be on the new crop contracts and not benefit the current market. The most potential for elevated old crop corn sales at this time would be a disruption to Black Sea exports but even there the window is rapidly closing as the Safrinha harvest in Brazil will be underway in a matter of weeks. Trade is much less concerned about the decline we have seen in soybean sales, which are now 4% below expectations as that commodity remains in a rationing position. Cumulative wheat sales are nearly equal to expectations.
Have a great day!
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