Grain Comments: 04-24-2023

Good morning:

Nearby corn dominated trade volume overnight and the spot May contract is actually working on a higher high and low thus far but is trading lower this morning; prospects look less rosy going down the line on deferred contracts, with the key new-crop December contract hitting a nine-month low overnight. The trade still seems confident that U.S. corn and soy-bean crops will get planted in a timely-enough fashion, even though May is approaching quickly; forecasts remain cold but dry enough going forward for fieldwork to pick up. Russia continues to threaten to scrap the Black Sea ex-port deal, a daily occurrence at this point, up into its expiration next month.

Friday afternoon’s USDA Cattle on Feed Report showed all U.S. Cattle on Feed as of April 1 at 11.612 million head, or 95.6% of last year; that was above the average trade estimate of 95.0%. March placements came in at 99.4% of LY, well above the 94.8% guess, with March marketings at 98.9% of LY, a shade below the average 99.1% trade expectation.

The weekend was mostly clear (though extremely cold) across the Plains and corn belt after action moved out to the southeast late last week, precipitation looks scattered and light to start this week before the next system develops in the southwest tomorrow and Wednesday, shifting into the heart of the Midwest through Thursday/Friday. The best rains this time actually look to hit the southwestern Plains through mid-week, including the panhandles and the bulk of Kansas. Extended maps are clearly trending cool and dry through the last days of April and first week of May.

Rains mostly favored northern Brazil over the weekend, but chances will shift center-south this work week to aid some dry safinha corn areas there; 6–10-day maps are running drier as precipitation again moves back out to the north.

The main focus of trade to start this week will be positioning for the month end. This will generate more activity in the market as corn, soybeans, and wheat will all go into delivery in the May contracts. Many traders have already rolled their positions to the deferred contracts but there are always a few lefts to finish up. Along with this we will see more interest in the US planting progress. As of last Sunday, 8% of the US corn crop was planted. While this was above average, it was below trade expectations. This week’s progress was limited by wet weather across the United Sates along with colder temperatures. Even so, planting still took place in some regions. There are also the yearly thoughts that actual planting is beyond what the USDA published. The bottom line is that we are not going to get much market support from a slower pace in April. If we continue to see corn planting delays when we move through May the market will react accordingly. Even so, more analysts do not believe current conditions are conducive to a 181 bushel per acre trend yield. There is much less concern over the soybean planting pace that was reported at 4% complete.

Have a great day!