- HEADLINES: Chicago starts new month/quarter with fund selling; Saudi purchases 795,000 mt of world wheat; China ships out US wheat.
- Midday Chicago values are red in a correction of Thursday’s post NASS crop report rally. Central US weather forecasts are favourable, and the NASS crop progress report is expected to show improved winter wheat conditions relative to prior years later this afternoon. And the bears argue that NASS will find acres by the late June Final Seeding report with normal spring weather. The combined impact has been a correction of Thursday’s Chicago rally with corn/wheat futures sliding back to the middle of their recent trading ranges.
- Soyoil futures are higher on active oil share spreading for seasonal considerations, the onboarding of the Phillips 66 renewable diesel plant in Rodeo California, and 2 California Air Quality BOD meetings with proposals on the table for feedstock supply origination certification.
- We expect a lower Chicago close today, doubting that either breaks or rallies can be sustained. World farmers are becoming more bullish and holding back on cash sales in the Black Sea, S America, and the US. Adverse weather in the EU (too wet), Black Sea (too dry) with the Brazilian soybean harvest surpassing 80% this week prevents breaks from being sustained. Otherwise, an adequate supply of old crop cash grain/soy caps rallies and the leaves Chicago in a choppy overall trend nearby.
- The new quarter started with fund selling. Chicago brokers estimate that funds have sold 6,900 contracts of corn, 2,200 contracts of wheat, and 4,700 contracts of soybeans. In the products managed money has sold 3,600 contracts of soymeal and bought 1,500 contracts of soyoil.
- For the week ending March 28 the US exported 56.4 million bu of corn, 15.2 million bu of soybeans, and 18.3 million bu of wheat. Mexico and China were the big importers of US soybeans, while China shipped 200,000 mt of US wheat). We estimate that the US has just 600,000 mt of US wheat that is open to ship of a sales total of 2.087 million mt. China has shipped out 1.5 million mt of US wheat in total in the crop year to date.
- For their respective crop years, the US has exported 1,018 million bu of corn (up 256 million or 33%), 1,359 million bu of soybeans (down 312 million or 19%), and 543 million bu of wheat (down 75 million or 12%). We look for WASDE to raise their 2023/24 soybean crush estimate upwards and adjust exports down by a like amount on April 11, allowing US soybean end stocks to hold at 315 million bu. WASDE should also raise its corn export forecast by 25-50 million bu based on record large Mexican import demand. Otherwise, any change in the April WASDE report will all be focused on S American crop sizes.
- Saudi Arabia is said to have purchased 800,000 mt of wheat for delivery into July at CIF prices that range from $252-273/mt according to export sources. The Saudi wheat was sold as optional origin and today would be supplied by the Black Sea on price. The Saudi purchase news has supported Chicago wheat values.
- Three storm systems take aim on the Central and Eastern Midwest over the next 10 days producing 0.75-4.00” of combined rainfall. The heaviest rain will be focused on IL, PA and TN. Spring seeding efforts will be initially delayed with the system for April 10-12 being further east than the overnight run. Snows are forecast for WI and portions of the upper Lake States mid-week. Warming temperatures follow with highs in the 50’s/60’s and lower 70’s.
- Chicago breaks will be well supported by short covering ahead of the new Northern Hemisphere growing season since the March Stocks/Seeding Report did not hold a bearish surprise. US winter wheat condition ratings will be well above recent years this afternoon. However, spring crops in W Europe are soaked and farmers are becoming worried with corn planting to begin in earnest next week. Ongoing dryness and budding heat draw Black Sea soil moisture downwards into mid-April. This is a crop area that will need close attention into May.