Grain Comments: 04-14-2023

Good morning:

Corn and soybeans look a bit more range-bound this morning after yesterday’s up-and-down session; buying interest remains in old-crop corn remains as old-new spreads widen out dramatically over the past month.

March NOPA soybean crush is expected to come in at 183.4 million bushels on Monday morning, up from 165.4 mbu in February and 182.5 mbu last March (a record for the month). Estimates range from 180.7-188.5 mbu.

Rain has fired up in the Dakotas this morning, shifting through the Midwest through Sunday with good coverage throughout, less so for the Plains. 6–10-day rains look heavier today, lesser so for the 11-15 day, with temps cool.

One of the main functions of the commodity market is to determine how much risk premium needs to be added to futures. There is a wide range of topics that can generate the need for risk premium although weather is at the top of the list. This is especially true at this time of the year when the planting and growing season gets underway in the United States. Weather conditions across the United States have been quite variable recently, with some regions of the US seeing drought while others are experiencing flooding conditions. The most drought concern right now is in the Lower Plains where even after recent rains, soils remain short of moisture. This has been an underlying source of support for wheat for several months. Dry conditions are less supportive for corn or soybeans at this time of year as they tend to lead to fast planting rates and can elevate acres. The weather concern on these crops is in the Upper Plains where snow melt will likely cause flooding in production areas and can easily delay or even prevent plantings. We are starting to see the addition of risk premium in the futures market, with mostly soybeans as that is the commodity with the tightest stocks to use and the one, we need the most production on. Overnight trade was weaker on soybeans and wheat as a lack of interest in the market weighed on those contracts. Corn was mixed as renewed export interest supported nearby futures while prospects for a large US crop weighed on the deferred contracts. To see this carry into day trade would not be a surprise.

Have a great day!