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Grain Comments: 04-21-2023

Good morning:

Beans dominated volume and led losses overnight, matching yesterday’s ten-day low in the early hours but recovering somewhat into this morning; the bulls need a big surge in both old and new-crop export sales.

This 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 from north to south across the belt over the past 24 hours, with action lingering south/southeast and snow northwest this morning; another system is on tap mid-next week but extended forecasts are drier besides that. Temperatures remain safely below normal up into the first week of May.

US exports continue to be pressured from two different points. One of these is the size of the crops coming out of South America and how it has pressured global values. This is mostly being seen in the soy complex at the present time where the record crop in Brazil has put considerable pressure on basis values. This has caused the spread between US and Brazil soybeans to reach $1.40. At this point it becomes economical for the US to import soybeans which we are starting to see take place. While the volume of soybeans US processors have bought is low, we could easily see more purchases in the future. The US is now seeing the price spread on corn widen as well. When the Safrinha harvest gets underway in another six to eight weeks this spread will widen even more and make Brazilian corn even more affordable for an importer. Another issue for US exports at the present time is currency valuations. The firm US dollar has deterred export interest for some time, and now that foreign currencies are starting to falter it is making their offers even more attractive. One of these is Brazil where political unrest is causing the Real to drop. This also encourages selling in the country as more revenue can be generated from dollar-based sales. Expect US weather models to drive today’s session, along with any updates on the Black Sea corridor.

 

Have a great day!

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