Corn and wheat edged out fresh multi-month lows overnight on favorable U.S. weather and weak overall demand, though soybeans bucked the trend and bounced from lows with a bit of help from crude oil. A stronger dollar is negative for the commodities overall this morning, though, with that sector generally not in favor as the marketplace waits for key inflation data.
The heaviest rains fell in the southern/southeastern U.S. over the past 24 hours, stretching up into the SE corn belt, with scattered amounts in the NW belt as well; rains remain in both areas today with western rains shifting into the west-central corn belt, out through the northeast up into the weekend. Extended maps remain dry, during both the 6-10- and 11-15-day time frames, with some warmer temps finally starting to move in from the west/northwest during those extended periods, after another cold weekend in the Midwest.
Light and isolated rains fell in northeastern Brazil yesterday, shifting south through the weekend into early next week, but extended maps are drier today.
Today is first notice day on the May contracts, which may elevate market activity. Many of the May contracts have already been repositioned but there are always a few left that give us erratic trade given the low volume of the contracts now that they are in delivery. Over the past week we have started to see more production estimates released, not just in the US, but globally. The most interest is falling on South America, mainly Brazil’s soybean potential. Analysts in the country believe Brazil will produce 159 million metric tons (mmt) of soybeans in the 2023/24 production year. This compares to this year’s USDA crop estimate of 153 mmt, which some believe is too low. Brazil is also expected to export 98 mmt of soybeans next year, 3 mmt more than this year. Analysts also expect to see a rebound in Argentine grain production from this year. Analysts are projecting an Argentine corn crop of 54 mmt, well above the 37 mmt estimate on this year’s crop. A larger wheat crop is also being forecast for Argentina. The main reason for these higher crop predictions is a shift to the El Nino weather pattern that tends to bring better growing conditions to that region of the globe. An expansion to plantings will also give South America larger crops, mainly Brazil.
Have a great day!